The House is expected to vote today on an expansion of the State Childrens Health Insurance Program (SCHIP). My colleague, Michael Cannon, has frequently written on the problems of this poorly targeted program that moves six children from private to public coverage for every four uninsured children that it covers. However, it is interesting to note that the $33 billion expansion is supposedly paid for primarily through a 61-cent-per-pack increase in the federal cigarette tax. Yet, at the same time, President-elect Obama announced that his choice for Deputy Secretary of Health and Human Services is William Corr, an anti-tobacco lobbyist and executive director of the Campaign for Tobacco-Free Kids. So we can shortly expect the Obama administration to step up efforts to stop people from smoking, thereby reducing the taxes they are counting on to pay for their SCHIP expansion. One hardly knows whether to wish them success.

In a new Cato Daily Podcast, Director of Information Policy Studies Jim Harper discusses overreaction to terrorism and what is required to avoid it.

A special 2‑day conference, “Shaping the Obama Administration’s Counterterrorism Strategy” begins today at the Cato Institute. You can find the schedule here and watch it live online throughout the day or tune into C‑SPAN at 1:15 pm EST.

Follow the conference on Twitter using the hashtag, #ct09.

In the ongoing Cato Unbound discussion about how the government should respond to excessive fear of terrorism, Bernard Finel writes:

The cynical response focuses on continuing the sorts of grand, empty gestures we have already pursued since 9/11. We can continue to pack our shampoo in 3 oz bottles and ignore the color coded signs and tolerate the petty annoyances. Over time, fear will fade and it is unlikely that this unfocused motion will result in grievous consequences.

Finel rejects this approach in favor of what he calls a pragmatic one. I wonder if the cynical approach is the pragmatic one. A realist might say that we can never get the public to be rational about the odds of dying from terrorism, so let’s hold down spending and try to push it toward uses that have benefits other than counterterrorism, sort of like how fear of Soviet missiles justified spending on scientific research and highways. I called this the “fake it” option in a list of possible approaches to homeland security. This approach is dishonest and patronizing, but not necessarily wrong, especially if efforts to correct overwrought fears fail.

Apparently, Obama’s nominee to head the Office of Information and Regulatory Affairs is on the same page. Here’s the conclusion to a working paper called “Overreaction to Fearsome Risks” that Cass Sunstein wrote with Richard Zeckhauser:

Government regulation, affected as it is by the public demand for law, is likely to stumble on the challenge of low probability harms as well. The government should not swiftly capitulate if the public is demonstrating action bias and showing an excessive response to a risk whose expected value is quite modest. A critical component of government response should be information and education. But if public fear remains high, the government should determine which measures can reduce most cost effectively, almost in the spirit of looking for the best “fear placebo.” Valued attributes for such measures will be high visibility, low cost, and perceived effectiveness.

They meant, I believe, to include the word “it,” meaning “public fear” after “reduce.” So, in other words, fake it. It’s not surprising that Sunstein wrote this — his books, from which I learned a lot, head toward the same conclusion. But it will be interesting to see whether this kind of talk, shrouded though it may be in academic speak, gets him into any trouble now that he’s up for an important government job.

In other cost-of-fear-of-terrorism news, both Stephen Dubner of the Freakonomics blog and Bruce Schneier ask whether the diversion of federal attention from crime to terrorism since 9–11 helped cause an outbreak of financial fraud. They cite this New York Times article discussing the shift of FBI resources to counterterrorism. Dubner is unsure, but I say it’s a no-brainer that moving 2,400 FBI agents from crime to counterterrorism and the resulting 40 percent drop in financial crimes referred to US Attorney’s for prosecution caused more financial crime.

We will be discussing the cost of counterterrorism at the conference taking place Monday and Tuesday. Registration is closed because we’re full. But the event will be webcast live on Cato​.org. C‑SPAN will also be taping Monday afternoon.

I’m sorry to be late to this party, but it’s really great to see Stephen Walt blogging for Foreign Policy magazine. Walt is now clearly the most high-profile academic realist in the blogosphere, and it’s terrific he’s blogging. A lot of people like to call themselves realists inside the Beltway, but they’re basically all liberals, in IR terms. Actual realists have long been egregiously underrepresented in the American government, the American media, and basically everywhere in the U.S. outside the academy. More people need to hear realist voices. Realists wisely opposed the Iraq war, and have a host of ideas about how the world works that, if they gained greater sway in Washington, might help prevent the next couple of screw-ups the government is planning for us.

Here’s a good post from Walt on defense spending. Walt writes that you’d think, since the United States enjoys a terribly benign threat environment, just elected a liberal Democrat president, and is facing an economic meltdown, the bloated defense budget ought to be on the chopping block:

Here’s why it won’t happen any time soon. As Cindy Williams, former director of the National Security division of the Congressional Budget Office and now a senior research scientist at MIT, points out in an as-yet unpublished paper for the Tobin Project, DOD is insulated from serious cuts by an array of impressive political advantages. First, its budget is more than 50 percent of all federal discretionary spending, and its sheer size gives it a lot of bureaucratic clout. Second, the Pentagon has a large domestic constituency: there are 1.4 million men and women in uniform, 850,000 paid members of the National Guard and Reserve, and 650,000 civilian employees. Forget GM, Ford and Chrysler: the Department of Defense is the largest single employer in the whole country. Now add the companies that provide goods and services for the military. Their employees amount to about 5.2 million jobs, which is a pretty impressive domestic constituency. And don’t forget those 25 million veterans, who are hardly shrinking violets when defense spending is concerned. Finally, a well-financed group of Beltway bandits and Washington think tanks stand ready to question the patriotism of any politician (and especially any Democrat) who tries to put the Pentagon on a diet.

Matt Yglesias responds to this with a note of surprise, and then an endorsement:

It seems unlike a realist to cite domestic political dynamics as the cause of national security policy, but clearly this is correct.

This is a pretty common objection when realists talk about foreign policy, as opposed to international politics, but it belies a misunderstanding of the theory. Realists talk a lot about structure in the international political context: various structures of the balance of power push states in one direction or another. If Mexico were twice as powerful as the United States, different structural forces would be acting on us. Realists note that structures “shape and shove” but don’t determine foreign policies. Kenneth Waltz memorably wrote in 1997 that states “are free to do any fool thing they care to, but are likely to be rewarded for behavior that is responsive to structural pressures and punished for behavior that is not.”

One of the things that’s really curious about today’s world (and another about which Walt has written) is the strange condition of unipolarity. Given the size of the power disparity between the United States and, well, everybody else, there are few structural constraints acting on American policymakers. So one major input, structure, that should play a powerful role in constraining statesmen’s options, isn’t really working.

Thus far the results have been pretty disappointing. American policymakers have tended to expansionism, to recklessness, and to grand strategies based on trying to dominate the world. A (hopefully) interesting theoretical question I’m kicking around is, Under unipolarity, what constraints are acting, given that structure really isn’t, and is there any reason to believe that any of these constraints will start limiting American strategic options any time soon? If there are no binding constraints in sight, aren’t we very likely (destined?) to continue with the primacy strategy we’ve followed more or less since 1991?

Thus far, it seems like the domestic inputs that Walt and Cindy Williams point to have provided policymakers a completely blank slate to do anything they wish–except choose grand strategies based on restraint. A lot of us yearn for a strategy of restraint, but it seems to me that it’s going to take some pretty serious tinkering with domestic politics to get us there, given the factors described above and the absence of meaningful structural constraints. As it is, we’re dealing with fundamentally unchecked power. Which both realists and libertarians ought to be wary of.

This month’s Cato Unbound began yesterday, with a fascinating title and topic: Keep Calm and Carry On: How to Talk about Terrorism.

The term is trite, perhaps, but terrorism is handily described as a form of psychological warfare. It’s a wonder, then, that more time and attention hasn’t been paid in official Washington to communications strategies pertaining to terrorism.

People elsewhere have been giving it focus, and the author of the lead article is Bill Burns, a research scientist at Decision Research and consultant at the Center for Risk and Economic Analysis of Terrorism Events. His piece is called “The Path Well Taken: Making the Right Decisions about Risks from Terrorism.”

You are hereby assigned it as reading, but here’s an inspiring quote from Burns’ closing paragraph:

America may yet offer the voice of calm and deliberative action to a world as shaken as we. And through these travails, we must lead by example, inspired by our constitutional freedoms and drawing from the best of our science and culture.

Watch for follow-on commentaries by Bernard Finel (January 7), John Mueller (January 9), and Camille Pecastaing (January 12).

Burns is a speaker, and this topic will be one of the subjects, at Cato’s two-day conference on counterterrorism strategy which begins on Monday next week. Read more and register here.

President-elect Obama has pledged to go through the federal budget “line by line” to root out waste. In this new video, Cato analysts Chris Edwards, Sallie James and Daniel Ikenson explain why the Department of Agriculture is a great place to start.

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