Archives: 12/2009

Predictions for 2010

I was just listening to the December CatoAudio interview with Tom Palmer and Ian Vasquez about the fall of the Soviet empire 20 years ago, and Tom mentioned that even as late as October 7, 1989, when the East German government held a gala celebration of its 40th year in power, no one anticipated that within a month the Wall would open and communism would come to an abrupt end in eastern Europe.

And then I looked at the predictions of various scholars and pundits at Politico’s Arena one year ago today and noticed how wrong most of them were – Terry McAuliffe would be elected governor of Virginia, Rod Blagojevich would still be governor in April, Iran would test a nuclear weapon, several Republican members of Congress would switch to the Democratic Party (!), Justice Stevens would retire. No one predicted the surge of small-government, anti-spending sentiment, which was arguably the top political story of 2009.

And then, looking up who said “Nobody knows anything” (screenwriter William Goldman, about Hollywood), I stumbled on this blog post from October 2008:

I pulled from my desk drawer a copy of the Wall Street Journal from Wednesday, May 23, 2007.

It was not a particularly notable day.  The bull market was in force, and the Dow was hitting new highs … even though gasoline prices were at record levels.  But here at Cabot we had been noting a growing divergence in the market; both the NYSE Advance-Decline Line and the Nasdaq had failed to confirm the Dow’s high.  Also, we detected a high level of optimism among both investors and the general media.  So I saved The Wall Street Journal, in part because of the lead article that announced, “Why Market Optimists Say This Bull Has Legs.”

The subhead of the article followed with, “They See Decade of Gain Fed by Global Growth; Skeptics Cite Big Doubts.”…

So I reread the article and what did I find?  Fundamental talk about global growth, low interest rates and a technology revolution that would boost productivity.  [One bull] even had the courage to utter the phrase that makes an experienced investor quail, ” … it really is different this time.”

Also given ink were the detractors, who claimed that reversion to the mean was inevitable, that low interest rates couldn’t last, and that the weak dollar and above-average P/E ratios would eventually pull the market down.

But here’s what I found interesting (in hindsight):  Not once in the entire article did anyone mention credit!!!

Today, we know from our rearview mirror that credit was the culprit of a decline that has crushed the global financial system.  But just 17 months ago, a reporter looking for reasons the bull might not last found no one mentioning credit!

All of which is to explain why you’re not going to find any predictions for 2010 in this post.


Watch-Lister to Review Watch-Listing

White House ethics counsel Norm Eisen’s conclusion that John Brennan should participate in the reviews of the attempted bombing of Northwest flight 253 is interesting.

Currently serving as assistant to the president for homeland security and counterterrorism, Brennan formerly worked at the Analysis Corp., a contractor that helped develop the watch-list system, one of many security measures that did not prevent the attacker from boarding a flight into the United States.

In my review of some of the security systems involved in the failed attack, I agreed that watch-listing failed, but I am at a loss to imagine how it could succeed.

On the merits of the ethical issue, Eisen cites Brennan’s long experience and the importance of this matter to national security as reasons that Brennan should be granted a waiver from the general two-year ban on political appointees having involvement in matters involving former employers and clients.

But these factors cut equally well, if not better, in the other direction: Long experience can bring a person too close to the problem to see solutions. And national security is too important to let insiders review their own work. 

I have no reason to doubt his good faith, but Brennan’s substantive judgment is likely to be obscured by familiarity with, and sympathy for, watch-listing. He will be unlikely to give sufficiently close examination to the question whether it provides security value given its failure here and its costs in dollars, constitutional principles, and privacy.

Kudos are due the White House and Norm Eisen for posting the ethics waiver on the White House blog. Brennan’s assessment of watch-listing should get similar airing so that the public can review his work aware of his probable sympathies. An outside review may lose something in inside knowledge, but make up for it with gains in substance and credibility.

Executed for Sorcery? In 2009?

A court in Saudi Arabia has sentenced a Lebanese television host to death for the crime of “sorcery.” Apparently Ali Hussein Sibat was recognized by Saudi religious police as he made a pilgrimage to Mecca. On his show, he gave advice to callers and made predictions about their future. He could be executed any day now. In an article in the Daily Star of Lebanon, the leading English-language newspaper in the Middle East, Cato senior fellow Tom G. Palmer and University of Chicago dean Raja Kamal call on King Abdullah to face down the religious police and release Ali Hussein Sabat to Lebanon:

This case illustrates the tremendous power of the religious police in Saudi Arabia. King Abdullah faces an uphill battle in his struggle against extremists; not only the Al-Qaeda terrorists who kill innocent people, but the religious police and judiciary, who kill innocents as well….

The king and his supporters need to act decisively to eliminate the power of the extremists to carry out improper arrests, level false charges, coerce testimony, and conduct unjust trials, especially those culminating in murder. Sibat and others in his situation are being made into human sacrifices by the extremists in order to maintain their own power….

Lebanon also has a responsibility to speak up for and to protect its own citizens. The government of Prime Minister Saad Hariri has a special relationship with the ruling family of Saudi Arabia. That’s why the government needs to show that, as the representative of a democratic Arab country with a strong broadcasting industry, it will support freedom of expression – particularly that of Ali Hussein Sibat and others who broadcast from Lebanon.

Horizontal Inequities in ObamaCare

In this week’s New England Journal of Medicine, Mark Pauly and Bradley Herring show that the employer mandates passed by the House and Senate – where employers can either “play” by providing health benefits or pay a penalty – would result in grossly unfair treatment of similar individuals.  Regarding the House bill, they write:

[B]ecause each company’s decision to play or pay would bedriven by its average wages, heterogeneity within companieswould cause the subsidies for many individual workers to bemismatched with their level of need. Moreover, tax penaltiesand subsidies that depend on a company’s size would result infurther inequity among low-wage companies, because subsidiesfor workers with the same income would be larger if they workedfor small companies (which had to pay smaller penalties) thanif they worked for large ones.

What kind of inequities are we talking about?

Low-wage workers in a high-wage company would be worse off thanlow-wage workers with identical productivity in a low-wage company.For instance, a single worker earning $21,660 — 200% ofthe federal poverty level for an individual — would receivea net subsidy of $3,574 through the exchange if he or she wereemployed at a low-wage company choosing to “pay” but would geta subsidy (a tax exemption) of only $1,887 if employed at ahigh-wage company choosing to “play.” The $1,687 differencerepresents about 32% of the premium and 8% of the worker’s income.

The same kind of inequities exist for higher-wage workers:

Forinstance, a worker earning $43,320 — 400% of the federalpoverty level for an individual — would have to pay $866(2% of payroll) in lower wages if he or she were employed ata low-wage company that opted to pay a tax penalty but wouldeffectively receive a subsidy of $2,407 if he or she were employedat a high-wage company that opted to provide insurance. Thedifference is about 63% of the premium and 8% of income…So high-wage workers would beworse off in low-wage companies than in high-wage companies.

Here’s their graph showing how the House bill would penalize low-wage workers in high-wage firms, and high-wage workers in low-wage firms:

Note also that the falling subsidies for low-wage workers would discourage them from climbing the economic ladder.

Terrorism and Security Systems

Terrorism presents a complex set of security problems. That’s easy to see in the welter of discussion about the recent attempted bombing on a plane flying from Amsterdam into Detroit. The media and blogs are poring over the many different security systems implicated by this story. Unfortunately, many are reviewing them all at once, which is very confusing.

Each security system aimed to protect against terror attacks and other threats involves difficult and complex balancing among many different interests and values. Each system deserves separate consideration, along with analysis of how they interact with one another.

A helpful way to unpack security is by thinking in terms of “layers.” Calling it security “layering” is a way of describing the many different practices and technologies that limit threats to the things we prize. (It’s another lens on security, compatible with the risk management framework I laid out shortly after the Fort Hood shooting.)

Let’s think about some of the security layers deployed to protect people on airplanes against someone like the individual who sought to bomb this flight into Detroit. There are many different security layers. Examining how they worked or failed positions us to tune our security systems better for the future.

It would make sense to start with the security measure that ultimately ceased the attack—human intervention—and move out layer-by-layer from there. But we should actually start by pondering what course events might have followed if the attack hadn’t been thwarted when it was.

The design of airplanes is a security layer that this event did not implicate. Few people are aware that planes are designed to survive damage—even significant damage—and still remain aloft. The seat assignment of this would-be bomber comes into play here, of course. Did he seek out a seat along the wing intending to damage fuel tanks, or was it just a chance assignment? We don’t know yet.

Depending on how events might have unfolded in the event of an actual blast, various other layers may have come into play: pilot training, other design elements of the plane like redundant controls, availability of first aid equipment, flight crew training, and so on.

The good news—worth stating again because much commentary overlooks it—is that this plot failed.

The security layer we credit most for its failure is the direct intervention of other passengers. People who discuss only government programs or policies overlook an important, forceful, and highly adaptive security layer: empowered individuals. We should not prefer to rely on this kind of human intervention, of course—it kicks in far too late for comfort. But it is there, and in this case it worked.

Next, there is weapons detection. The consensus is strong that this layer failed, but this layer did some work, which also shouldn’t be overlooked.

To get it past anticipated security checks, the “bomb” had to be modified in a way that ultimately reduced it to a far less dangerous incendiary device. It wasn’t human intervention alone, but the combination of the weapons detection layer and the human layer that foiled the plot.

Nonetheless, given the consensus that weapons detection failed outright, it is likely that millimeter wave scanning (aka “strip-search machines”) will see broader adoption in air security, trumping privacy concerns that had dealt it some setbacks.

Another layer—more clearly a failure—was the watch list/no-fly list system (or systems). Watch-lists are porous when they’re at their best: They can only catch people already known to be threats, and then only those who are accurately identified at the airport.

Secretary Napolitano originally said that there wasn’t specific derogatory information to justify placing this person on a no-fly list, but unfolding reporting suggests that this was not the case. I agree that watch-listing failed, but I struggle to imagine how it could actually succeed. What general rule, administered on the scale required, could properly deny boarding to genuine attackers without unacceptably denying travel to thousands and thousands of non-attackers every year? Making sense of watch-listing is difficult, and it’s no surprise to me that this security layer failed.

A sibling layer is visa management. Unlike the last-minute decision whether or not to allow a person onto a plane, visa applications can be examined with some leisure, using not only lists of derogatory information but also information gathered from applicants and other sources.

Foreign nationals have no right to enter the United States, and the decision to exclude people seems well placed at this layer compared to last-minute use of watch-lists or no-fly lists.  By comparison to authorities in the UK, who evidently excluded him, it appears to have been error to allow the Detroit bomb plotter to have kept his U.S. visa. This is yet another security issue deserving investigation.

Other security layers, of course, include whatever intelligence  might have been picked up in Yemen and whatever actions might have been taken in light of it.

Are there more layers of security to examine? Undoubtedly there are.

One of interest to me might be called the “strategic layer”—steps to deny terrorists the strategic gains they seek. It is unclear what goal, if any, the Detroit bomb plotter had, but  U.S. National War College professor of strategy Audrey Kurth Cronin identifies a number of “strategies of leverage” terrorism seeks to exploit.

Terrorists are weak actors, unable to muster conventional forces that threaten a state directly. So they try to use the power of the states they attack to achieve their aims. Provocation is an example—getting a state to overreact and undercut its own legitimacy. Polarization is another: Most often in domestic contexts, terror attacks can drive wedges among different ethnic, religious, or cultural groups, destabilizing the state and society.

Mobilization is the strategy of leverage most likely at play here—seeking to recruit and rally the masses to a cause. There’s no argument that this alienated loner is an articulate strategist, of course, but his attack could signal the importance of terrorism to a worldwide audience, making terrorism more attractive to opponents of U.S. power.

Even a failed attack could send such a signal if U.S. government authorities allow it. I wrote in an earlier post how their reactions will dictate the “success” or “failure” of this attack as terrorism.

As to the strategic layer, I believe that, amid programmatic and policy failures, President Obama is due credit for his handling of communications. It was very pleasing to see a Washington Post story Monday headlined: “Obama Addresses Airline Security in Low-Key Fashion.” He is obligated to respond to domestic demands for communication, of course, but declining to exalt terrorism and this incident should not earn him demerits. It should earn him applause.

The alternative—hustling the president of the United States in front of cameras to make incautious statements—would send an unfortunate signal to the world: Any young man, from anywhere across the globe, can poke the president of the United States in the eye, even if his attack on a U.S. target fails. Such a message would invite more terrorist acts.

Attacks not mounted aren’t measured, of course, but attacks would likely increase if it appeared that attacking the U.S. and its interests could visibly fluster the U.S. president. The discipline shown by the White House during this event is an important contribution to our security from the next attack. Politicians beneath President Obama’s grade should take a lesson and control their reactions as well.

Next, I hope to see communications that subtly and appropriately portray the underwear bomb plotter as the loser that he is. I have declined to use his name, because this wretch should go namelessly to oblivion. And I am pleased to see that U.S. authorities have released an image of his underwear, half-suspecting that this was done to help make his legacy the indignity of being beaten by Americans and having his underwear displayed to the world. 

I am also pleased to see him called the “underwear bomber” in some news reports. I would call him the “underwear bomb plotter” because he only managed to light a fire. This is not to trivialize the attack, but to diminish the standing of the person who committed it. People around the world who might consider terrorism are watching how we react to this event, and I want no one to believe that following in the footsteps of the underwear bomb plotter is a good idea.

Let’s also observe that the plane he would have brought down bore innocent women and children. Among them likely were many good Muslim people. Had he succeeded, he would have added to the count of orphaned children in the world. This is not someone to emulate, and official communications should be sounding these themes if they aren’t already.

Given how difficult it is to physically foreclose all vectors of attack while maintaining our society as open and free, strategic communications like this—to deny terrorists the rhetorical gains they seek from us—are very important. Portraying this person as a wrongheaded failure is part of the strategic layer in our security, far preferable to treating him as a diabolical anti-hero.

This incomplete discussion is intended only to illustrate the many different security layers at issue in the underwear bomb plot. Thoughtful readers will undoubtedly find gaps and misstatements in this discussion based on more precise facts and better technical or programmatic knowledge than I have.

Thankfully, we have an opportunity to learn about our security from this failed attack. Had it succeeded, it appears that our society remains ill-equipped to maintain an even keel. The intensity of commentary and analysis on this event shows that a successful terrorist would likely knock us off our game. The impulse to do something—anything—would overwhelm us, and we would likely overreact by retaliating imprecisely, by pouring our energy into security measures that don’t actually work, and so on. Such missteps are congenial to terrorism, and we should try to avoid them.

Talking about Terrorism

Terrorists are named after an emotion for a reason. They use violence to produce widespread fear for a political purpose. The number of those they kill or injure will always be a small fraction of those they frighten. This creates problems for leaders, and even analysts, when they talk publicly about terrorism. On one hand, leaders need to convince the public that they are on the case in protecting them, or else they won’t be leaders for long. On the other hand, good leaders try to minimize unwarranted fear.

One reason is that we shouldn’t give terrorists what they want. Another is that fear is a real social harm, particularly when it is exaggerated. Stress from fear harms health. It causes bad decisions. For example, if people avoid flying and drive instead the number of added fatalities on the road will quickly surpass the dead from a typical terrorist attack. Most important, excessive fear causes policy responses that often damage the economy without much added safety. Measured in lives on dollars, reactions to terrorism often cost more than the attack themselves.

If leaders talk only about the danger of terrorism and everything they are doing to fight it, without putting danger in context, they may be on safe political ground, but they risk causing or prolonging groundless fear and encouraging all sorts of harmful overreactions. That is the Bush Administration’s counterterrorism record, in a nutshell. If leaders just say “calm down and worry about something more likely to harm you,” they will be butchered politically.

So a reasonable approach is to sound concerned but reassuring. You want to convince people that they are mostly safe without appearing complacent. I don’t like many of this administration’s counterterrorism policies, starting with Afghanistan, but thus far its communication about terrorism is far more sensible than the last administration’s. That includes the aftermath of this attempted Christmas Day attack.

The administration made it clear that it is unacceptable that a guy we just got warned about got onto a plane wearing explosives. But the President also said Americans should be generally confident in their safety from terrorism. He didn’t act as if this incident was the most important thing on his schedule this year or compare the Al Qaeda affiliate in Yemen to the Third Reich or what have you, exaggerating their capability and power. I wish he had gone further and said that detonating explosives smuggled on to a plane is tricky and that flying remains incredibly safe. (Jim Harper will soon have more to say here on the security failures and how to talk about them.)

In a different political universe, the President could describe the terrorist threat honestly. He would say that recent attempted terrorist attacks in the United States show more amateurism and failure than skill and success. He could add that we are fortunate that our greatest enemy, al Qaeda and its fellow-travelers, are scattered and weak compared the sorts of enemies we historically faced. He would sound more like Michael Bloomberg, who told New Yorkers that they had a better chance of being struck by lightening than killed by terrorists, after a particularly inept terrorist plot on JFK airport was uncovered. He could even quote Nate Silver, who calculates that in the last decade of US flights, there was one terrorist incident per 11,569,297,667 miles flown. It’s true, as Kip Viscusi demonstrates, that people don’t think like actuaries. They rightly value different sorts of deaths in different ways, and want more protection against terrorism than other dangers. But knowing the odds is still important in weighing the appropriate amount of concern and forming policy preferences. The president could also have treated voters like grown-ups and pointed out that whatever flaws in airline security that this attempted attack reveals, there is no such thing as perfect safety, and sooner or later even the finest security systems fail.

I also disagree with the argument that the trouble with our airline security or national security policy-making in general is insufficient presidential attention. Overall, we could do with a little more masterly inactivity in security policy, to use an old British phrase. Aviation security is another matter, but I struggle to see how presidential involvement would have fixed this problem. The 9-11 Commission did claim that September 11 occurred because leaders failed to pay sufficient attention to al Qaeda, but there, as in other matters, the Commission is wrong. At least in the executive branch, the attention paid to the threat in the 1990s was quite substantial, as you can see in this essay by Josh Rovner or in my contribution to this book. The historical record shows that the threat was well understood by security officials and the reading public. Time, for example, called Osama bin Laden the most wanted man in the world when they interviewed him in 1998. The trouble, in my opinion, was not misperception but our policies and the difficult and unprecedented nature of problem–a terrorist group ensconced in hostile country that refused to do anything about it.

Getting the line between confidence and vigilance right is not easy, but it starts with acknowledgment that there is such a thing as overreaction. That subject will be the on the agenda for our January 13 counterterrorism forum with James Fallows, State Department Counterterrorism Coordinator Daniel Benjamin, Paul Pillar and others.

*My attempts to explain this stuff to Politico yesterday resulted in some confused and inaccurate uses of my quotes in this story by Carol E. Lee, which unconvincingly compares the Obama’s response to this terrorist attempt to his silly involvement in the Henry Louis Gates arrest fiasco. First, Lee absurdly uses me as example of “predictable” attacks from the right on Obama, when I said I was glad that the President said Americans should feel confident but that I’d have preferred if he’d done it more forcefully by saying flying remains safe and al Qaeda weak. That is more or less the opposite of the predictable take on the right. Then, she says that my views on the President’s response to the attacks referred to his post-press conference golf outing. I was talking about his overall response, or lack thereof, over the last several days. I can’t decipher the meaning of presidential golf.

It’s the End of 2009. Where Are Our Troops?

This is not the change we hoped for. President Obama rose to power on the basis of his early opposition to the Iraq war and his promise to end it. But after a year in the White House he has made both of George Bush’s wars his wars.

Speaking of Iraq in February 2008, candidate Barack Obama said, “I opposed this war in 2002. I will bring this war to an end in 2009. It is time to bring our troops home.” The following month, under fire from Hillary Clinton, he reiterated, ”I was opposed to this war in 2002….I have been against it in 2002, 2003, 2004, 5, 6, 7, 8 and I will bring this war to an end in 2009. So don’t be confused.”

Indeed, in his famous “the moment when the rise of the oceans began to slow” speech on the night he clinched the Democratic nomination, he also proclaimed, “I am absolutely certain that generations from now we will be able to look back and tell our children that … this was the moment when we ended a war.”

Now he has doubled down on the war in Afghanistan and has promised to keep the war in Iraq going for another 19 months, after which we will have 50,000 American troops in Iraq for as far as the eye can see. If McCain had proposed this sort of minor tweaking of the Bush policy, I think we’d see antiwar rallies in 300 cities. Calling the antiwar movement!

President Obama’s promises are becoming less credible. He says that after all this vitally necessary and unprecedented federal spending, he will turn his attention to constraining spending at some uncertain date in the future. And he says that he will first put more troops into Afghanistan, and then withdraw them at some uncertain date in the future (“in July of 2011,” but “taking into account conditions on the ground”). Voters are going to be skeptical of both these promises to accelerate now and then put on the brakes later.

The real risk for Obama is becoming not JFK but LBJ – a president with an ambitious, expensive, and ultimately destructive domestic agenda, who ends up bogged down and destroyed by an endless war. Congress should press for a quicker conclusion to both wars – and should also remember the years of stagflation and slow growth that followed President Johnson’s expansion of the welfare state.