Paul Pillar

The Free-Market Deficit

Paul Pillar

Debates in the United States over the economy, government and business tend to be viewed as one between free marketeers on the Right and government interventionists on the Left. As Arthur Brooks, president of the American Enterprise Institute, puts it at the outset of this week's edition of the Washington Post's “Five Myths” feature:

The 2012 presidential campaign is shaping up to be a battle of two economic philosophies. One favors a greater redistributive and regulatory role for the government; the other prioritizes the values of free enterprise, including private property, individual liberty and limited government.

It is appropriate to view some issues of public policy this way. Some people, who are found more on the Left than the Right, believe that even a smoothly operating free market does not meet all important public needs. There may be, for example, tragedy-of-the-commons phenomena that lead to unacceptable environmental degradation, to which an appropriate response is government-introduced incentives that lead the market to operate in a less destructive way. There may be other social needs, such as safety nets for the disadvantaged, to which the favored response might be not a tilting of market incentives but instead a circumvention of the market with governmental programs. Of course other people, found mainly on the Right, have different views about such issues.

In looking around at what is wrong with our crisis-generating, inequality-accentuating economy, however, one finds far more instances in which there is not enough of a free market than of ills flowing from a free market's unfettered operation. Brooks gets to this point when he identifies as his fourth myth to dispel, “The free market caused the financial meltdown.” Actually, says Brooks, “It wasn't free enterprise that was at fault; it was the lack of free enterprise.” He's right about that, although in his zeal to indict government he quickly narrows his description of the problem. “Statism and its co-dependent spouse—corporate cronyism—melted down our economy,” he says, pointing to the housing bubble and the role of government-chartered Fannie Mae and Freddie Mac.

That sort of codependence is indeed part of the problem, and one could find glaring examples of it in, say, the military-industrial complex. Another example that recently came to light through investigative journalism of the New York Times is a privatized system of halfway houses in New Jersey, run by a firm with close ties to the state's governor, Chris Christie. The halfway houses are houses of misery with awful supervision and resulting rampant drug use, gang violence and frequent escapes. As Paul Krugman, someone who approaches most political and economic issues from a much different perspective than Arthur Brooks, has observed, one thing companies like the one running the halfway houses

are definitely not doing is competing in a free market. They are, instead, living off government contracts. There isn't any market here, and there is, therefore, no reason to expect any magical gains in efficiency.

But government-contractor cronyism is still only a piece of the problem. The deficit in free markets is found in much else of the private sector, where there is no governmental angle at all. The myth involved here is that a private sector untrammeled by government interference equals a free market. It doesn't.

Take, for example, the compensation of corporate chief executives. CEO pay in the United States is vastly inflated, by any of several measures: by how much it has increased over the years, by comparison with pay throughout the same enterprises, by comparison with pay for CEOs in European corporations, by comparison with pay for senior executives in government and just by contemplating the value added by any one person, even the one in the top job. If we had a free market in CEOs, the pay of most of them would be much lower. Those are, after all, highly desirable jobs. For every CEO who is pulling down $10 million annually, there are probably several comparably talented executives who would love to have the position, would run the company just as well and be willing to do the job for a mere, say, $3 million. But there is nothing close to a free market in CEOs. Instead, what passes for corporate governance in much of the American private sector involves self-perpetuating structures led most often by an executive chairman.

A few months ago I attended a forum, oozing with a free-market ethos, in which the dominant theme of the speakers was the unwisdom of government interference in the private sector. Another member of the audience had the temerity to raise an issue about CEO pay along the lines of what I just mentioned. The response from the stage was, “Well, if a company gets the right person, those several million dollars aren't going to be very important.” When the questioner shot back that this assumes there is only one “right person,” the moderator changed the subject.

The departures from a free market often take the form of assuming there is only one “right” something—a CEO, an investment bank, a management adviser. At least as often the departures are a simple matter of control and exclusion. This is frequently the case in the financial sector, the portion of the American economy that is most bloated and parasitic and that attracts a disproportionate amount of young talent for the same reason that Willie Sutton robbed banks: because that's where the money is. Never mind for the moment the corruption of free markets that involves outright illegality, a new instance of which seems to arise nearly every week—including insider trading and, in the most recent story, the manipulation of Libor. Many bushels of money are made legally not by someone providing a superior product or service in competition with other providers but instead as a function of special access to assets, high barriers to entry by would-be competitors and manipulations too complicated for others—including not just the public but even would-be government regulators—to understand. These factors, especially the last one, had at least as much to do with the recession-precipitating financial meltdown as the government-chartered status of the giant mortgage companies.

The politically driven attention to Bain Capital has provided another window into the deficiency of free markets in the financial sector. The deficiency goes beyond the general respect in which the private-equity game (other than the part that involves venture capital helping to get start-ups off the ground) is itself a testimonial to a deficiency in free markets and to how players in the game are positioned to do things that John Q. Investor cannot. Where exclusion and an absence of competition became a surefire moneymaker for Bain was after it took control of a business, when it could then use that control to milk fees from the company no matter how well or poorly it was doing. As one description in the Times puts it:

Bain structured deals so that it was difficult for the firm and its executives to ever really lose, even if practically everyone else involved with the company that Bain owned did, including its employees, creditors and even, at times, investors in Bain's funds.

One example was a Michigan-based automotive supplier that sustained mounting losses for three years before filing for bankruptcy in 2000. All through this period, Bain continued to collect an annual $950,000 “advisory fee.” Over five years, Bain extracted more than $10 million in various fees from the company, while the $16 million stake that Bain's investors had in the company was wiped out. This situation is the antithesis of a free market, in which those who do better in open competition become financial winners and those who do not are losers. There was no competition for Bain's “advice.” This was instead a game of "heads I win, tails you lose."

Where government can intervene to increase the role of free markets in the economy, it should—not because government intervention is good but instead because free markets are good. The clearest example of such intervention is antitrust enforcement. Admittedly, beyond classic antitrust cases the opportunities for government to do good in this way are much harder to identify. It is one thing to go after a Microsoft or the old AT&T, in which the antitrust enforcers could count computers or telephones and make a case about a monopoly. It is something else to identify noncompetitive aspects of legerdemain in the financial sector, let alone to come up with feasible ways to do something about it.

Even if government solutions are not always obvious, let us at least be clear and honest about the nature of the issues involved. The usual way of expressing the main lines of debate, as Brooks expresses them, is incorrect. There is nothing anti–free enterprise about spotlighting and criticizing the structural inadequacies in the private sector or in favoring regulation to correct those inadequacies. To the contrary, such critics are the true proponents of free markets. The enemies of free markets are those who defend the status quo or resist any government interference with the private sector no matter what noncompetitive excesses, inequities and impediments that sector embodies.

Image: dmixo6

TopicsBankingDomestic PoliticsEconomic DevelopmentPolitical Economy RegionsUnited States

A Pragmatic President in Arabia

Paul Pillar

As outside observers try to make predictions about what Egypt's Islamists will do with their popularity and electoral successes, an additional data point arose this week with Mohamed Morsi's first foreign trip as president, to Saudi Arabia. In a way, it was remarkable that he traveled anywhere outside his country this soon after taking office, given that he is in the middle of a constitutional crisis in which he is at loggerheads with the judiciary and the military over whether parliament can meet, not to mention the huge uncertainties over his own office's powers.

The selection of a destination for a head of government's first overseas trip traditionally is taken as symbolic statement, of course, and on the surface it is unsurprising that the most populous Arab state and the most economically influential one would give priority to their relationship with each other. But there also is a long history of animosity between the two countries—leading the republican and monarchical poles of the Arab world—going back to Nasser's time and the waging by Egypt and Saudi Arabia of a proxy war in Yemen in the 1960s. The political upheaval in Egypt of the past year and a half has not helped the relationship. The Saudis were annoyed at the United States for supposedly throwing Hosni Mubarak under a bus, and anything even faintly revolutionary in their part of the world makes the rulers of a medieval family-based political structure nervous. The overlap of Islam and politics that characterizes both the Saudi regime and Morsi's Muslim Brotherhood represents more of a disjunction than a common thread between them. The Brotherhood—given the path it has taken and the electoral success it has enjoyed—is a living statement that a Saudi-style structure is not necessary and that a democratic system is compatible with respect for Islamic principles.

Morsi evidently said enough to put his hosts at ease and to keep his brief visit cordial. The trip suggested that what is more important to him than anything religious (although he did perform the Umrah, or minor pilgrimage) or ideological are pragmatic considerations, especially economic ones. Saudi investment and remittances from Egyptian workers in Saudi Arabia are important ingredients in trying to come anywhere close to meeting Egyptians' inflated economic expectations. There also is a wider foreign-policy dimension to the trip. Despite much talk lately about how an Egypt under Morsi rather than Mubarak will move toward better relations with Iran, the trip demonstrated that Iran is not Morsi's first choice of partners among competitors in the Persian Gulf. A further pragmatic consideration was no doubt involved here, too, with an awareness of how dyspeptic Washington would get over anyone improving relations with Tehran.

All in all, it is hard to see how anything about the trip would have been different if it had been made by an Egyptian leader not labeled an Islamist and not having “Muslim” in his party's name.

Image: Jonathan Rashad

TopicsEconomic DevelopmentIdeologyReligion RegionsEgyptIranSaudi Arabia

The Functions of Conscription

Paul Pillar

Thomas Ricks has made a thought-provoking proposal for reinstating the draft. It plays off a comment from General Stanley McChrystal, the retired former commander in Afghanistan, who said last month, “I think if a nation goes to war, every town, every city needs to be at risk. You make that decision and everybody has skin in the game.” Ricks's proposal has significant flaws, and Christopher Preble has enumerated several of them. There are more issues involved in this question than first meet the eye, however, and some further examination and discussion would be useful.

Ricks's specific idea is to offer everyone (males and females) several options upon coming out of high school. One would be eighteen months of military service but without the prospect of deploying overseas. Instead, these conscripts would be used for stateside jobs such as “paperwork, painting barracks, mowing lawns, driving generals around, and generally doing lower-skills tasks so professional soldiers don't have to,” and the tasks would not have to be expensively outsourced either. Pay would be low but attractive post-service benefits would include subsidized college tuition. Any conscripts who wanted to stay in the service would get better training, pay and benefits upon moving into the professional force.

Another option would be two years of civilian service such as cleaning parks or caring for the elderly, also at low pay but also with similar post-service benefits. Finally “those who want minimal government” could opt out of national service entirely but with the understanding that not helping Uncle Sam means not asking anything from him: “no Medicare, no subsidized college loans and no mortgage guarantees.”

Evaluating a proposal such as this requires bearing in mind that conscription can serve several different purposes. The obvious one is to provide bodies to fight wars, and Ricks's idea of nondeployable conscripts does not appear to serve that purpose. Neither does it do much to serve the purpose that McChrystal had in mind; mowing lawns and painting barracks does not really mean having a skin in the game of war. At the risk of reprising the Vietnam War experience that some in younger generations are tired of hearing about, the way that the draft put every town and every city at risk back then was to risk having their sons killed in a combat zone. The career-delaying inconvenience of military service was also a factor for many young men, but it was not nearly the attention-getter as the danger of becoming a casualty.

It also is hard to envision how Ricks's two-class system of conscripts and professionals would function in practice at military bases across the country. The conscripts would be barely distinguishable from civilian employees, although subject to military discipline. The closest we have come to that situation was during the last few months of the Vietnam War, when the Nixon administration stopped sending draftees to Vietnam, but that period was too short to draw any conclusions.

But another purpose, which a proposal such as Ricks's could serve, is to impart in the population a greater sense of service and obligation to the nation. It would be a way of bolstering an important element of the civic culture. A good case can be made that we need to do more along this line. Despite all the tub-thumping nationalism one sees and hears in present-day America, that nationalism entails more thoughts about taking and less about giving than was true a half century ago when John Kennedy called on Americans to ask what they can do for their country rather than vice versa. It is perhaps symptomatic of this transition that this year's presidential election will be the first since World War II in which neither of the major party candidates has served in the military. And neither one performed alternative national service such as in Americorps or the Peace Corps. One of them dedicated himself from an early age to climbing the ladder of political power; the other dedicated himself to making a boatload of money by manipulating the ownership and control of businesses.

Still another purpose of conscription, which is one of the main grounds on which Ricks defends his proposal, is to provide a supply of cheap labor to meet national needs, including needs of the military, at low cost. Here is where we need to think of the question in the same terms of burden sharing and economic equality or inequality that we use to think about tax rates and other aspects of fiscal policy. I commented earlier this year, when Ricks previously advanced the idea of reinstating the draft but did not offer a specific proposal, that the wealth and inequality in the U.S. economy are necessary conditions for the all-volunteer army to work. We are wealthy enough to provide the pay and benefits to help attract people to the difficult and dangerous military profession. The inequality means there are enough people whose alternative opportunities are sufficiently modest or downright bad for them to be attracted to the military without our having to make military pay and benefits sky-high. One way to phrase the current question of whether to reinstate a draft is: Should a significant part of the levy that the federal government imposes on its citizens be, in addition to the income and payroll taxes that people pay, an in-kind levy in the form of modestly compensated labor in young adulthood?

There are several reasons that favor an affirmative answer to that question. Required national service would be a noble way of counteracting the inequality that the current all-volunteer system for the military exploits. In a sense the in-kind levy would be a progressive tax, in that the career-delaying opportunity costs would tend to be relatively greater for those already enjoying a higher economic status. The burden of such service generally would be easier to carry at that stage in people's lives—and it would be a paid job, after all—than, say, higher taxes on many older middle-class adults. The government also would get more bang for its buck. As Ricks puts it, think of how much could be saved “if a few hundred New York City school custodians were 19, energetic and making $15,000 plus room and board, instead of 50, tired and making $106,329.”

Then there is the advantage of not being burdened with all the ideological baggage that burdens the discussion of taxes—the money kind, that is. As long as Grover Norquist does not expand his no-tax-increase pledge to cover in-kind levies of national service, maybe we actually could have an intelligent public debate on the subject. It is a debate we ought to have. Thanks to Ricks for encouraging such a debate, even if his own proposal is flawed.

TopicsIdeologyPolitical EconomyState of the Military RegionsUnited States

The Nothing-But-Pressure Fallacy

Paul Pillar

As the nuclear talks with Iran hover in a sort of holding pattern with meetings below the senior level, there seems to be no end to advice from those saying the only chance of success is the exertion of pressure, more pressure and nothing but pressure. That makes about as much sense as, when encountering a door that needs to be pulled to open and having failed to open it by pushing, we respond by simply pushing harder. The latest such advice is in an op-ed from Michael Singh of the Washington Institute for Near East Policy. The West has given its best shot as far as sanctions are concerned, says Singh, and the sanctions by themselves are not sufficient and are not likely to be sufficient even given the passage of more time. Well, he's right about that. But taking Singh at his word that his objective is to achieve compromise at the negotiating table, he gives not the slightest hint of recognition of what needs to be brought to that table for compromise to happen.

Here's the relevant key concept from Sanctions 101: we induce the government that is the target of our sanctions to concede by getting it to understand that we will continue to punish it if it does not concede and will stop punishing it if it does. (Or, more incrementally, that we will start reducing the punishment if the other side starts conceding.) It's really that simple. And the story of stasis in the nuclear talks is also pretty simple. The Iranians have made it clear they are willing to make the key concession about no longer enriching uranium at the level that has raised fears about a “break-out” capability in return for sanctions relief. But the P5+1 have failed to identify what would bring such relief, instead offering only the tidbit of airplane parts and the vaguest of suggestions that they might consider some sort of relief in the future. The Iranians are thus left to believe that heavy pressure, including sanctions, will continue no matter what they do at the negotiating table, and that means no incentive to make more concessions.

If the oil sanctions aren't enough, what other pressure does Singh say should be used? One is “bolder” efforts, whatever that means, to oust the Assad regime in Syria, and regardless of whatever implications that may have for escalation of that conflict. Another is an ill-defined reference to “cultivating Iranians outside the narrow circle around” the supreme leader or “providing support to dissidents” in Iran. No mention is made of how to get around the inherently counterproductive aspect of outside efforts to manipulate internal Iranian politics, or how one more indication that regime change is the ultimate Western objective is supposed to make the current regime more interested in making concessions. Finally, Singh calls for more military saber rattling—as if the threat of a military attack is supposed to make the Iranians less, rather than more, interested in a nuclear deterrent to protect themselves from such attacks. That makes as much sense as pushing yet again on the “pull” door.

We probably should not take the purveyors of such advice at their word. Surely at least some of them, including probably Singh, are smart enough to understand the basics of Sanctions 101. Their objective evidently is not success at the negotiating table but instead the indefinite perpetuation of the Iranian nuclear issue for other reasons or the checking off of a box on a pre-war checklist.

The Obama administration, by contrast, would welcome negotiating success but evidently has calculated, perhaps mistakenly, that it would be too politically damaging domestically to bring to the negotiating table what would be necessary to achieve success. The administration is correctly attempting to ward off destructive Israeli action, although it is uncertain whether keeping the negotiating process trundling along at its current pace and trajectory for a few more months would be sufficient to do that. And yes, Governor Romney, if we are concerned about what would be most damaging to U.S. interests in the Middle East, the prospect of a new war begun by the state most capable of dragging in those interests is more worth worrying about than an Iranian nuclear weapon (which such a war would not prevent anyway and would be more likely to encourage).

Image: futureatlas.com

TopicsDomestic PoliticsSanctionsNuclear Proliferation RegionsIsraelIranUnited States

Democratic Form Without Substance in Libya

Paul Pillar

It is easy for those either inside or outside Libya to get enthused about the election there this weekend. For some of those inside the country, the enthusiasm was expressed with horn-honking and the waving of fingers stained with the ink used to discourage repeat voting. Among outsiders, President Obama congratulated Libyans for “another milestone on their extraordinary transition to democracy.” United Nations secretary-general Ban Ki-moon complimented the Libyan candidates for contesting the election “in a peaceful, democratic spirit.”

Given controversy among Libyans about the terms of the election and disruptions associated with that controversy, maybe congratulations are indeed in order for holding any election at all. Protestors stormed polling stations, armed militias prevented some voters from entering their assigned stations and tribal warfare in the South kept some polling places closed altogether. In the days preceding the election, other protests shut down oil-export terminals and closed the coastal highway. On Friday, a helicopter carrying election materials was shot down near Benghazi. These were only the most visible signs that Libya has a very long way to go to become a workable democracy.

The principal grievances underlying the violent disruptions concerned dissatisfaction over the allocation of legislative seats among regions, with the easterners of Cyrenaica being especially dissatisfied with their allotment. This was a reminder of how fragile any sense of national unity is in a country that is a patchwork of what were different provinces in imperial times. Less than two decades separated Libya's independence (before which it was ruled by Italy, which snatched it from the Ottomans) from the coup d'etat that initiated the more than four decades of Muammar Qaddafi's highly personal, institution-destroying rule. Libya has not had sufficient time and experience to develop a well-entrenched sense of nationhood.

Western press coverage of the early, unofficial election results has applied what has become the usual yardstick of how non-Islamists did versus Islamists. This is not a useful way to view results, partly because that dimension does not correlate with prospects for a stable democracy or even with support for other U.S. interests. It also is not useful in the Libyan case because the large number of newly born parties and alliances that contested the election do not divide clearly with regard to the favored role for Islam in public life.

Religion was less important an influence on voting decisions than such personal and candidate-specific factors as association with the old regime. Most important were sentiments based on tribe, family, and all of the patronage considerations associated with tribal and family ties. One candid member of the Warfalla tribe (the same tribe to which former interim prime minister Mahmoud Jibril, leader of the alliance reported to have done best in the election) explained before the voting, “We are racist and each will vote for his own tribe—and not only his own tribe, but the family within the tribe closest to his.”

Missing from the electioneering in Libya was the sort of debate over ideologies and governing principles that we routinely associate with representative democracy in the West. That absence in turn is part of a pattern that has been seen elsewhere in the Middle East during the Arab Awakening: people welcome the idea of democracy and are happy to participate in it, but they have little understanding of what it entails beyond that it is an alternative to a despised dictatorial regime and that it has something to do with casting votes, along with the ink-on-the-finger business. This is a far cry from developing widespread understanding, let alone the ingrained habits, necessary for Western-style democracy to function.

An added piece of confusion, similar to what has arisen next door in Egypt, concerns what the representatives being elected will be empowered to do. Originally, the elected body was supposed to function not only as a temporary legislature but also as a constituent assembly to draft a new constitution. Then the self-appointed Transitional National Council determined that the new body would not write the constitution itself but instead would choose a separate group to perform that task. Then two days before the election, the council said the constitution would be written by a completely separate body to be chosen in the future by a separate vote.

Despite the confusion and controversy, the process we are seeing may still in the long run—perhaps a very long run—lead to a political structure that is in some respect democratic, is better for Libyans than what they had before and is better for the rest of the world that has to deal with Libya. In the meantime, however, the post-Qaddafi Libyan story as it has played out so far has a couple of lessons. One concerns how much messiness and instability are apt to follow the overthrow of regimes in this part of the world. The lesson becomes all the more acute when bearing in mind two other things. One is that Libya has fewer complications regarding sectarian and ethnic divisions than do some other regional states, such as Syria. The other is that there is good reason to believe that the worst instability in Libya is yet to come, once disagreements are even less held in check than they are now by post-Qaddafi good vibrations.

The other lesson concerns how premature it is to put the NATO military intervention of last year into the win column, as it so frequently is.

Image: Al Jazeera English

TopicsDemocracyDomestic PoliticsNATOElectionsHumanitarian Intervention RegionsEgyptLibyaSyria

The Coming Feckless Debate on the Arms Trade

Paul Pillar

A conference opened this week under the auspices of the United Nations to draft a multilateral treaty aimed at controlling the international trade in conventional arms. Such a treaty potentially could do significant good, although many legitimate questions remain concerning its terms and feasibility. Neither the good nor the bad is likely to be clarified in public discussion about the treaty within the nation that is the world's biggest arms exporter and thus the most important player in this process: the United States. We are more likely to hear the sort of ill-informed debate that too often has characterized treatment of multilateral conventions, as we have seen most recently with the law of the sea treaty.

The background of the prospective arms-trade treaty being discussed in New York should make politicization of the issue in the United States unsurprising. A resolution of the U.N. General Assembly intended to advance the subject in 2006 passed with 153 states in favor, twenty-four abstentions and a vote against by the United States. Three years later, the Obama administration reversed its predecessor's opposition and announced its support for negotiating the treaty.

The opening sessions of the conference earlier this week featured what has become a staple of procedural issues in any forum connected to the United Nations: what to do with the Palestinian delegation. The United States followed its usual practice of falling in behind Israel and threatened to walk out if the Palestinians were included. An eventual compromise involved what might be described as observer status with enhanced seating. This did not entirely please anyone—not least the delegation from the Vatican, which was given the same treatment as the Palestinians and complained about not being accepted as a full participant.

What debate has already taken place in the United States on the prospective treaty has featured some of the same infringement-of-sovereignty notions that were heard in opposing ratification of the law of the sea convention. In the case of the prospective arms-trade treaty, the National Rifle Association has been out in front with warnings about how the treaty supposedly would circumvent the Second Amendment. Assurances that no such treaty would affect domestic laws about possession of firearms has not dissipated such notions. Last fall, a majority of U.S. senators signed a letter seconding the NRA's worries about the Second Amendment.

Some of the legitimate reasons to raise doubts about an arms-trade treaty concern its effectiveness—and its effect on the arms balances in local conflicts—given the extent of gray-market arms dealing outside the control of governments that would be parties to the treaty. Other legitimate concerns involve the inevitable differences of view in trying to develop criteria for proscribing or limiting arms transfers and in applying any such criteria consistently in different areas of conflict. One man's contribution to local security is another man's stoking of regional instability.

Informed debate about these and other legitimate concerns is likely to be less prominent than ill-informed statements about such things as taking away the people's right to bear arms. The fact that the conference in New York is scheduled to conclude its work near the end of this month—amid a U.S. presidential election campaign—will make the subject ripe for the crasser forms of politicization.

On U.S. insistence, the rules of the conference provide that unanimity is required for a draft treaty to emerge directly from it. A plausible scenario is that unanimity will not be achieved, that a draft supported by most nations will go to the General Assembly for endorsement, and that a treaty will be opened for signature and will even enter in force without the United States having endorsed it. That will repeat the experiences of the law of the sea convention and the treaty that established the International Criminal Court, with all the uncertainties of the United States not being a party to a major element of otherwise widely accepted international law.

If that happens, among those likely to be disappointed will be American arms exporters, who look favorably on an arms-trade treaty as a way of standardizing the many different national rules with which they now have to deal.

TopicsArms ControlDomestic PoliticsUNInternational LawTrade RegionsUnited States

Fragility in America

Paul Pillar

I have been absent from these pages the past few days because my household is among the many in the mid-Atlantic region that had to practice how to live without electricity. The storm and resulting outages have not been without their advantages. My meteorological knowledge and my vocabulary have both expanded, for example, as I have learned what a derecho is. The refrigerator and freezer have received overdue cleanings once the spoiled and useless contents were removed. But unsurprisingly most of the thoughts this interruption to comfortable, modern American life has engendered have been negative.

A frequent theme of commentary following such events is how ill-prepared we evidently would be to cope with big disasters such as major terrorist attacks. Such comments were heard again after last week's storm, especially given the failure in the Washington area of some 911 emergency services. Those observations are valid, but my own thoughts went in somewhat different directions.

The effects of the power outages demonstrated how much the stability and prosperity of our society are built on highly interconnected and longstanding patterns of mutual dependence. An absence of electricity in homes meant people driving along roads without functioning traffic lights, to stores that because of their own outages may not have had the food and supplies the people were seeking.  When everything works well in normal times it is not because someone is doing something great today; it is instead because we are benefiting from patterns established in the past—established perhaps in part because of something great that someone once did, but at least as much because of a nation's good fortune involving geography and resources or the historical accidents underlying development of culture and customs.

It is not just physical infrastructure such as an electrical power grid that entails slowly developing mutual dependencies. It also is a matter of the behavior of individuals and institutions. I was at the mercy of my local power company regarding when I would get my power back. The company says that it follows reasonable priorities in working first to return power to vital facilities such as hospitals, and then to neighborhoods where a single repair can restore service to many customers rather than just a few. I have no reason to doubt that the utility does follow these priorities, but I really don't know if it does. Perhaps some of the local politicians, who always seem quick to make an issue of inadequate emergency responses, will help to keep the utility on the straight and narrow. I don't find this possibility very reassuring. Political pressure could have negative effects equivalent to plowing snow first on the streets where city councilmen happen to live, to the inconvenience of those who live on other streets.

Some of the most important long-standing patterns do not involve physical infrastructure at all. They involve the mutual expectations and habits that are important to the proper functioning of a liberal democracy. Those expectations and habits—although we take them for granted most of the time—are ultimately at least as fragile as any electrical grid.

These thoughts lead to the conclusion that the biggest threats to what is fragile (and valuable) in the United States come not from an external force such as a natural disaster or an attack by international terrorists. They come instead from a breakdown of our own long-established customs and mores, especially as they relate to political life. One can see disturbing signs of this in the deterioration of previous mutual respect, civility, and shared sense of need.

TopicsBanking RegionsUnited States

Egypt's Risk and the Bargain at Camp David

Paul Pillar

The outcome of the Egyptian presidential election has stimulated renewed hand-wringing over the future Egyptian posture toward Israel and the peace treaty between the two countries. What the winner of the election, Mohamed Morsi, has actually said on the subject does not seem to have reassured the hand-wringers. The concerns, rooted in Islamophobia and stoked by innuendo associating the Egyptian Muslim Brotherhood with extremists of the Al Qaeda ilk (notwithstanding the Brotherhood and Al Qaeda being adversaries of each other, with drastically different philosophies and strategies) have involved an image of the Brotherhood somehow being innately and irretrievably hateful of Israel.

All of this disregards the main reason that not just Morsi or the Brotherhood but also most Egyptians who have any opinion about Israel are critical of it. That reason goes back to the origin and context of the Egyptian-Israeli treaty. Its American midwife, Jimmy Carter, knew what were the biggest issues underlying the hostility between Israel and its Arab neighbors. His goal was not just an Egyptian-Israeli treaty but a comprehensive peace between Israel and its Arab neighbors. He realized that this required a satisfaction of Palestinian national aspirations and a resolution of the problem of Israeli occupation of land on which the Palestinians lived, a situation that already was a decade old when Carter became president. Part of Carter's challenge was the reluctance of Arab leaders to risk getting a step ahead of their Arab brethren and being seen to make a separate peace with an adversary still occupying land inhabited by Arabs and seized by military conquest. Even Jordan's King Hussein, who among the frontline Arab leaders had the closest relations with the United States, was unwilling to be the first to take that gamble. It required the audacity of Anwar Sadat and the shock of his trip to Jerusalem to break the impasse.

Egypt's weight as the most populous Arab state and one that had won its spurs in multiple rounds of fighting with Israel was a reason, along with Sadat's boldness, for it to be the one to take that gamble. But even for Egypt, it was still a big risk. Menachem Begin and the Israeli government saw advantage in separating Egypt from the other Arab states and dealing with it one-on-one. For Egypt any such separation was clearly a hazard and a net negative. It would be worth accepting only if it led the way to a broader peace that did involve the other Arabs.

Thus when Carter convened Begin and Sadat for a fortnight of intense bargaining at Camp David in 1978, that broader peace—and the key ingredient of it, a resolution of the Palestinian problem—was necessarily as important as any bilateral arrangement governing Egyptian-Israeli relations. Two documents emerged from the bargaining, with equal standing. One of them provided a framework for the bilateral relationship, leading to the Egyptian-Israeli peace treaty signed the following year. The other document was “A Framework for Peace in the Middle East,” which provided for full Palestinian autonomy and a withdrawal of Israeli troops from Palestinian territory within five years. This and the peace treaty were all part of the same bargain.

Despite the inclusion of the framework document about the Palestinians, many Arabs outside Egypt and a good number inside it believed that Sadat had committed the sin of a separate peace and had been hoodwinked by Begin. The largest of the frontline Arab states had been taken off the front line, with only an unenforceable promise about the future status of Palestinian land. (With occupying Israeli troops still in place twenty-nine years after the projected five-year period, and hundreds of thousands of Israeli settlers later, who can say that such concerns about the Camp David accords were without foundation?) Egypt paid a price in the form of regional ostracism. It was suspended from the Arab League for ten years, with the Arab League headquarters moved from Cairo to Tunis. Three years later, Sadat paid the ultimate price at the hands of Islamist extremists within the Egyptian military who thought he had sold out the Arab cause.

A big difference between then and now, of course, is that for the most recent ten years, the Arab League has been on record as accepting a comprehensive peace with Israel, provided that the old problem of Palestinian rights and Israeli occupation gets resolved. This constitutes a sort of vindication of Sadat's hope that his boldness would eventually lead the other Arabs to come along, and in this sense the ostracism and associated costs to Egypt are now in the past. But for Egyptians, the willingness of the other Arabs to make peace is all the more reason there is no excuse for not fulfilling the bargain that was reached at Camp David. Egyptians believe that they have lived up to their side of the bargain but that Israel has not lived up to a very important part of its side. If you want to understand why Egyptians, in or out of the Muslim Brotherhood, have negative things to say about Israel, you need look no farther than this history.

TopicsPost-Conflict RegionsIsraelEgyptJordanUnited StatesPalestinian territories

Informed Americans Favor Cutting Defense Spending

Paul Pillar

An innovative poll, conducted jointly by the Center for Public Integrity, Program for Public Consultation and the Stimson Center and discussed this week at the Council for Foreign Relations, provides a perspective on American public attitudes toward defense spending that would be hard to glean from anything heard in political campaigns, including the current one. Most traditional polls that simply ask out of the blue for a view on whether spending on the U.S. military should be increased, decreased or stay about the same get as the predominant response that it ought to stay about the same. The new poll investigated what Americans favor if confronted with relevant data as well as arguments on each side of the issue of defense spending.

The poll began by providing each respondent information about current U.S. spending in several different frameworks: in comparison with other discretionary programs, with entitlements, with previous years' defense budgets (both in constant dollars and as a percentage of GDP), and with defense spending of allies and potential adversaries—in other words, in just about every possible way in which the data could be framed. Respondents were asked after each framing whether defense spending was more, less or about the same as what they had expected. “More” responses significantly outnumbered overall the “less” responses. Next the respondents were presented with equal numbers of arguments that explained the main reasons people either oppose or favor cuts in U.S. defense spending. The arguments put the most reasonable face on each side of the issue. Respondents were asked after each argument whether it was convincing. Every argument—those against as well as those in favor of spending cuts—was convincing to a majority of those polled.

It was only after reading the data and the arguments, and being reminded of what the actual defense budget is for 2012, that the respondents were finally asked what they think should be spent on national defense for 2013. A large majority (76 percent) would cut the budget, with only 10 percent favoring an increase. The average of all the amounts proposed represented a cut from 2012 of $127 billion. Possibly a more meaningful figure—to reduce the effect of extreme outliers—was the minimum amount that a majority of respondents would cut: a majority favored a cut of at least $83 billion. Differences according to party affiliation were in the expected direction, but even a majority of Republicans favored cuts of at least $50 billion (Democrats would cut at least $106 billion).

Not to put too fine a point on it, but the comparison of these results with those of the simple out-of-the-blue questions about defense spending can be summarized this way: uninformed Americans may support maintaining current defense spending, but informed Americans favor substantial cuts.

So why have the politics of this issue shaped up the way they have, with one presidential candidate proposing large increases in defense spending and without hearing much from other leaders that sounds equivalent to the crash course in defense budgets that respondents received in the course of taking this poll? The short answer is that most Americans are ill-informed about such matters, it has never been politically advantageous to believe otherwise and it is unrealistic to think a political campaign can be made into a crash course on anything.

A more immediate factor concerns the threat of sequestration that emerged from the Congressional supercommittee's failure to reach a budget agreement. That threat, with the possibility of substantial defense cuts next year, appears to be about the only thing with any chance of inducing even a hint of flexibility about revenue raising among hitherto inflexible Congressional Republicans. The Obama administration and Secretary of Defense Panetta are thus not inclined for the time being to say anything that makes that threat sound less threatening.

More generally, the role that rhetoric about defense spending plays in an election campaign may often be less about defense spending itself than about how such rhetoric is a way to exude toughness and strength on national-security matters. That sort of image burnishing appears to be how Mitt Romney is using the defense-spending issue, especially given the arbitrary, pulled-out-of-a-hat quality that some of his numbers have. The tactic may work. Even some of the same people who when polled favored a level of defense spending far different from Romney's may still respond positively to his tough-guy posture on national security.

In brief, our defense spending is in large part determined by a political process that involves widespread public ignorance, a ham-fisted approach to budget cutting necessitated by one side's refusal to compromise and a he-man approach to debating national security. What a way to make policy. Perhaps once we get past the sequestration business we can have, if not a crash course, at least a national debate that is serious enough and deep enough for the public to make the sorts of choices the poll showed the public can make when it is sufficiently informed.

TopicsCongressDomestic PoliticsDefensePublic Opinion RegionsUnited States

Politicized Justice

Paul Pillar

Consider the following harsh criticism of the Obama administration's recent decision not to initiate deportation proceedings against some young illegal immigrants who came to the United States as children and meet certain other qualifications involving educational credentials or military service. According to the critique, this decision constitutes a “policy choice of lax federal enforcement” and an indication that the administration's priorities “include willful blindness or deliberate inattention to the presence of removable aliens.” The critique continues that “federal policies of nonenforcement will leave the states helpless” before the “evil effects of illegal immigration.” The criticism goes on to say that the Obama administration is practicing “unwise targeting” of funding for federal enforcement activities. “The husbanding of scarce administrative resources can hardly be the justification” for the president's decision because—as the critique asserts, without supporting analysis or data—“considerable administrative cost” would be entailed in identifying those not subject to deportation.

Who is making this harsh attack on the president's policy? Any of the many Republican members of Congress in whose eyes Barack Obama can do no good? Perhaps a Republican border state governor such as Jan Brewer? No, the criticism is from Justice Antonin Scalia, in his partial dissent from a Supreme Court decision handed down on Monday. So presumably the legality of the administration's enforcement policy was the issue before the court? No, not at all. The subject of the case was a state law in Arizona and the issue was whether this violated the allocation of powers between the federal government and the states with regard to immigration.

Scalia is a brilliant intellectual combatant, and his excoriation of the administration 's immigration policy was on the face of it part of an argument about how less-than-total enforcement of a federal law supposedly opens up room for state enforcement on the same subject. But his polemical foray into a policy debate blatantly exceeded the bounds of judicial temperament and discretion. It demonstrated how far politically inspired judicial activism can go even when that activism is put in the service of upholding a questionable law rather than striking one down. As was noted in the New York Times's coverage of the court decision, “Scholars who have followed the work of the court for decades said they could not recall an instance similar to Justice Scalia's commentary on a political dispute outside the record of the case under consideration.”

Scalia will, of course, serve on the Supreme Court as long as he wants to. But this episode provides support for Jonathan Turley's idea, which deserves consideration for other reasons as well, to expand the Supreme Court. An expansion would dilute the impact of the excesses or idiosyncrasies of any one justice.

TopicsDomestic PoliticsImmigration RegionsUnited States

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