Paul Pillar

Buying Policy on Israel

Paul Pillar

In this first presidential election since the Citizens United decision of the Supreme Court took away Congress's legislative ability to reduce the corrupting influence of big money on the U.S. electoral process, there are worrisome manifestations of that influence every week. For example, Mitt Romney right now is doing some fund-raising in Britain among banking nabobs on the heels of the Libor-fixing scandal. A cochair of an event that is charging $25,000 to $75,000 a head to schmooze with the presumptive GOP nominee is the chief lobbyist of Barclays. He replaced in that role former Barclays chief executive Bob Diamond, who resigned (from his bank job and from his role in the Romney fund-raiser) because of his bank's central role in the scandal.

But if I had to identify one source of big money whose influence is most worrisome on issues I happen to think about a lot, it would be someone who will meet Romney at a later stop on his current overseas trip, in Israel. That source is casino magnate Sheldon Adelson. Two things about Adelson's role in this post-Citizens United world stand out. One is the sheer magnitude of the money involved. Adelson appears to be on track to be the single biggest individual donor in this U.S. election year—although we may never know that for sure, given the way the bundling of political money works and the refusal of the Romney campaign to identify the sources of its bundled money. Adelson's fortune is currently estimated at about $24 billion. He has taken in stride the fluctuation of his wealth by many billions as shares of the Las Vegas Sands Corporation tanked during the recession before recovering, and he has repeatedly commented about how wide he intends to open his wallet to the candidate of his choice. During the primary season, that candidate was Newt Gingrich. Adelson said he would have been willing to give as much as $100 million to Gingrich's campaign, before that campaign ended and Adelson turned his support to Romney.

The other distinguishing characteristic of Adelson is the strength of his affinity to a foreign government—not just to a foreign country but to the policies of the current government of that country. It is appropriate that Adelson will be one of the greeters when Romney arrives in Israel because, although Adelson is a U.S. citizen, his declared primary allegiance is to Israel. Adelson once commented that when he did military service as a young man it “unfortunately” was in a U.S. uniform rather than an Israeli one and that all he and his Israeli wife “care about is being good Zionists, being good citizens of Israel, because even though I am not Israeli born, Israel is in my heart.”

Adelson is using his fortune to push a political agenda in Israel as well as in the United States. One way he has done that is by establishing five years ago a free-distribution newspaper, Israel Hayom, which has become the highest-circulation daily in Israel. The paper follows a firmly rightist, pro-Netanyahu line. As a business the newspaper is a money loser, but Adelson cheerfully has indicated his willingness to continue losing money on the paper (not a significant loss, in comparison with his fortune) to get its message across.

Israel already has a government to Adelson's liking, and he is using his money to sustain public support for it. In the United States, it is a matter of still trying to buy a government to his liking. His current hoped-for vehicle for doing that—Mitt Romney—has to date left his foreign policy largely a blank beyond slogans and the most general of themes. This was fully in evidence in his pre-trip VFW speech, in which the paucity of specific alternatives to the Obama administration's policies was as evident as the rhetorical vehemence with which the Obama foreign policy in general was denounced. (Jacob Heilbrunn has furnished a good guide on how to interpret that speech.) It is possible, of course, that very specific foreign-policy ideas are firmly embedded in the candidate's head, being kept in occultation there until he is elected. It is at least as plausible that there is much opportunity for those who would enjoy influence with a President Romney, including those most helpful in electing him, would have considerable opportunity to influence the policies that eventually emerge. In Adelson's case, so much money is involved that it is hard to believe that money would not buy something on matters he feels most strongly about. When Gingrich was his man, it bought a candidate who dismissed the Palestinians as an “invented” people.

Adelson probably has strong feelings about some of the same fiscal and economic matters that some other very wealthy Americans have strong feelings about. He has griped, for example, about the whole idea of progressive income taxes. But given where he has put both his money and his mouth, matters relating to Israel are of prime importance to him. Romney and the Republicans have, of course, been trying to use sentiment toward Israel as one of the themes for bashing Obama. Here's what Romney said about Israel in the VFW speech:

President Obama is fond of lecturing Israel’s leaders. He was even caught by a microphone deriding them. He has undermined their position, which was tough enough as it was. And even at the United Nations, to the enthusiastic applause of Israel’s enemies, he spoke as if our closest ally in the Middle East was the problem. The people of Israel deserve better than what they have received from the leader of the free world. And the chorus of accusations, threats, and insults at the United Nations should never again include the voice of the President of the United States.

The efforts of politicians to win votes by exaggerating differences often makes it hard to recognize how elements of continuity and similarity may be much greater than the differences. The Obama administration's policies toward Israel mostly have followed in the familiar bipartisan American pattern of great deference to the wishes of the Israeli government of the day. The billions of aid and security support continue unquestioned, regardless of the difficulties that Israel causes for U.S. interests. The acceptance of, and much U.S. help for, overwhelming Israeli regional military superiority continues. The Obama administration pointed out the unacceptability of Israeli colonization of occupied territory but then promptly caved to Netanyahu on the issue. On Iran, Obama has adopted the Israeli position about the “unacceptability” of an Iranian nuclear weapon, while saying nothing about the Israeli nuclear arsenal. And at the United Nations, it is hard to figure out what those “accusations, threats, and insults” are that supposedly have been voiced by the president, but under Obama the United States has continued to cast lonely vetoes—against the will and moral sense of the overwhelming majority of the world community—on behalf of Israel on subjects such as Israeli settlements built in occupied territory.

A markedly different U.S. course certainly could be envisioned, but it would not be a course that Romney is recommending and definitely not one that Adelson would want. Any difference between Obama's policies on Israel and what Romney is suggesting or Adelson is seeking is the difference between usual obeisance to Israel and complete obeisance to it. A change in this other direction would mean not only furnishing Israel with vetoes of U.N. resolutions about settlements but also not even raising the subject with the Israelis. It would mean being more careful around open microphones in commenting about how much of a problem Netanyahu is. It would mean a bigger act of outsourcing than anything done by any company controlled by Bain Capital: the outsourcing of an important segment of U.S. foreign policy to a foreign government. That is contrary to U.S. interests, no matter which foreign country is involved.

What Adelson is doing also is ultimately contrary to the interests of Israel. Those on the Israeli Left obviously are most inclined to see his activity that way. The blatant nature of his fortune-fueled political activism has also caused some unease in Israel because of the danger of eliciting the most damaging forms of prejudice. Ira Sharkansky of Hebrew University observes:

It's hard to imagine a better advertisement for the Protocols of the Elders of Zion than Sheldon Adelson. A Jew who is enormously wealthy on the basis of gambling enterprises on the fringes of respectability, who does not shrink from publicity about using his wealth for Jewish causes, . . . Adelson fits in the long tradition of court Jews, using their wealth to gain access to whoever is ruling in order to benefit the Jewish community. Where Adelson differs from Jewish traditions is in making his wealth felt in front of the curtains rather than behind them.

To the extent that Sharkansky's concerns about the exacerbation of anti-Semitism materialize, that would be bad in general and bad for Israel. Even if they do not materialize, Sheldon Adelson is doing no favor to the country he says he loves by promoting policies that condemn it to perpetual conflict and isolation. Sometimes love is blind, even in a man smart enough to have made billions.

Image: DonkeyHotey

TopicsDomestic PoliticsElectionsUNForeign AidThe PresidencyPost-Conflict RegionsIsraelIranUnited StatesPalestinian territories

Franz Kafka Lives (at Guantanamo and Bagram)

Paul Pillar

Among the legal anomalies and affronts to justice involved in certain things the United States does in the name of counterterrorism is an incarceration netherworld that seems likely to persist as indefinitely as the detention of many of the people caught in it. We didn't seem to have this problem before 9/11. But the popular sense, after that one off-the-charts terrorist event, that America was “at war” led to the problem. The Bush administration obliged by declaring a “war on terror.” Applying the established law of war would not suffice, however; that would have meant giving suspected terrorists the rights of prisoners of war. The response was to handle anyone who came into U.S. hands with some suspicion of possibly having something to do with terrorism as if they were not subject to any system of law and the rights associated with it. People scoffed up in Afghanistan or elsewhere were declared to be “illegal combatants” if they were declared to be anything at all. Most were sent to a newly established detention facility at Guantanamo, the location of which was not chosen so the prisoners could enjoy the mild Caribbean climate. The location was chosen with the intention of keeping detentions there outside the purview of anyone's law, given Guantanamo's special status as a base under a long-term lease that is outside the United States but also not subject to the sovereign control of any foreign country.

The ploy has not worked completely, in that the U.S. Supreme Court ruled in Boumediene v. Bush in 2008 that Guantanamo detainees have a right to contest their detention in U.S. courts. But the specific practices at Guantanamo continue to reflect the legal vacuum in which the prisoners find themselves. One recent decision by the Obama administration about which the New York Times editorial page appropriately took exception severely limits the right of prisoners to consult their attorneys in confidence. As one of the lawyers involved pointed out, this vitiates the right of habeas corpus that the Supreme Court formally bestowed four years ago.

It is not just prisoners at Guantanamo who are affected. This month a district court heard for the second time a case involving prisoners being held at a detention facility in Bagram, Afghanistan. The same court had earlier interpreted the Boumediene decision as applying not only to Guantanamo prisoners but also ones held at Bagram who had been captured someplace other than Afghanistan. That decision was reversed on grounds that a war zone is a war zone—and thus outside the jurisdiction of a civilian court—even if the prisoners in question had been nabbed somewhere else, although the appellate court left a possible opening for rehearing, leading to the current proceedings.

The main trouble-maker in much of this is the Court of Appeals for the D.C. Circuit, to which the Supreme Court seems content to give very free rein on this subject. It was the D.C. circuit court that ruled that capturing someone outside a war zone and then moving him into a war zone effectively removes his habeas rights. In another peculiar decision that reversed a district court's order to release a Guantanamo prisoner, the majority on a D.C. circuit court panel effectively said that any documents the government presents in arguing for continued detention should be accepted at face value—even though many such documents reflect questionable and unverified assertions. Near the end of its just-concluded session, the Supreme Court let this appellate court ruling stand without comment, even though the appellate judges who made that ruling barely disguised their contempt for the Boumediene decision.

A problem all along with the “war” formulation as applied to suspected terrorism is not only the twists one has to go through to avoid granting prisoner-of-war status. Since there is no well-defined entity this “war” is being waged against, there is no definable end to the anomalies involved. This problem applies not only to authorizations to use military force but also to detentions.

With no end in sight to the fundamental legal peculiarity involved, at least some of the procedural unfairness should be peeled back, such as that involving the attorney-client privilege. The executive branch's attorneys should also stop challenging the right of prisoners to petition for habeas corpus and instead concentrate on the facts in each case that would warrant continued detention. Finally, the U.S. Supreme Court ought to show the D.C. circuit who is boss by agreeing in its next term to hear one of the detention cases on which a majority at the circuit court seems determined to place its insubordinate stamp.

TopicsHuman RightsTerrorism RegionsAfghanistanUnited States

Abdullah Convokes the Muslims

Paul Pillar

King Abdullah of Saudi Arabia has called for a summit meeting of Muslim leaders to be held next month in Mecca. Described as an “extraordinary” summit, the gathering will be only the fourth such event in the forty-three-year history of the Organization of the Islamic Conference. The Saudi foreign minister, Prince Saud al-Faisal, said the aim of the meeting will be to try to achieve greater unity “during this delicate time as the Muslim world faces dangers of fragmentation and sedition.”

There is no shortage of agenda items for the leaders who will meet in Mecca. There has been more than enough in just the Arab portion of the Muslim world lately to distress the aged Abdullah and other Saudis. Syria will be at the top of the list; the Saudi call for the summit meeting coincided with another call by the Saudi government—for donations to help their Syrian brethren. Then there is the strife in neighboring states such as Iraq, Yemen and Bahrain. The Saudis will work hard to bring others to their point of view as much as possible on these and other divisive matters, but they are unlikely to achieve anywhere close to the unity they would like.

The main thing for Westerners to note about this convocation is that its impetus is not about opportunities for the Muslim world to expand its scope or influence, or even about anything involving confrontation with non-Muslims. Instead, it is about divisions within the Muslim world—what is fragmenting it and what is even, depending on one's viewpoint, a matter of sedition. Those divisions include ones among those who might all bear the label “Islamist”. (This includes the government of Saudi Arabia, whose king is Custodian of the Two Holy Mosques and whose constitution is the Koran.) The reasons for calling the summit meeting are a reminder not only, as Ahmed Charai has pointed out, that it is mistaken to talk about a rising Islamist tide. It also is mistaken to lump widely varying Islamists together in the way that much commentary in the West routinely does.

Image: Pikutthong

TopicsReligion RegionsBahrainIraqSyriaSaudi ArabiaYemen

Intervention and End Games in Syria

Paul Pillar

The past week's events in Syria have hastened a sense that the end of Bashar al-Assad's regime is in sight. Those events have included a bombing at the heart of the regime's high command that killed several senior security officials, a surge in combat in Aleppo and Damascus, and other insurgent gains such as the seizure of several border-crossing points. Comments about the situation in Syria have been framed more pointedly over the past few days in terms of when, rather than if, Assad's regime will fall, with a quickly growing expectation that “when” means soon.

This fast-moving situation invites reconsideration of recommendations that have been made during the past few months about the policy of outsiders, especially the United States, toward the conflict in Syria. Unsurprisingly, most will perceive in the latest events support for the courses they earlier recommended. The most vocal expounders on the subject have agitated for doing something more in Syria than the United States has done to date, although ideas vary about what that something should be. This school of thought sees the latest developments in the conflict as all the more reason for the United States to get more involved in the action, with an additional push against Assad being even more likely than before to see quick results. The very fact that the anti-Assad resistance has gotten where it is today, however, can be read at least as plausibly as confirmation that it was wise for the United States not to have gotten involved any more deeply than it has. This latter perspective gains further credence when remembering the added longer-term burdens of such involvement; the Pottery Barn rule applies to those who actively participate in smashing apart an old regime—as Nikolas Gvosdev reminds us is the case with Libya. The use of a humanitarian rationale to cover a NATO regime-change operation in Libya also has entailed a cost relevant to the Syrian situation, in the form of vetoes in the United Nations Security Council by Russian and Chinese governments that believe they were snookered by the West on Libya and do not want to be snookered again.

Speaking of humanitarian intervention, Robert Pape offers in the newest International Security an interesting framework for thinking about the subject. Pape proposes a “pragmatic standard” for humanitarian intervention, as an alternative to what he regards as the overly stringent standard of demonstrated genocide and the overly broad one of “responsibility to protect.” Pape says foreign armed intervention is warranted when it is needed to stop “mass homicide,” when there is a low-cost intervention plan available and when there are promising conditions for being able to establish lasting security. It is a sensible set of criteria. Applying them to Syria, Pape says his standard is not met, mostly because as a matter of geography, demography, and the related balance of strength between regime and opposition, there is insufficient basis for outsiders to intervene effectively at low cost.

The most recent developments in Syria occurred after Pape wrote his article, in which he left open the possibility of Syria meeting his standard “if a large region broke away from the regime en masse.” Perhaps the conflict in Syria is close to getting to that point. It should be noted that Pape is talking about armed intervention and not necessarily about other measures outsiders might take short of sending in troops. We should also note that in Syria, as in Libya if not more so, the issue of outside intervention really has no more to do with humanitarianism than with regime change that a lot of people want to see for reasons beyond the immediate saving of lives. Pape's glossing over this fact as it relates to Libya, where he considers foreign intervention to have been justified, is a weakness in his analysis.

The Obama administration is approaching the current situation in Syria correctly insofar as it is bracing for an implosion of the existing political order there, thinking of the problem less as shoving Assad out even sooner than he would be going anyway and more as one of doing whatever outsiders can do to minimize any spread or fallout of chaos after he does fall. The opportunities for the United States to do much good in this regard may still be minimal. Doing good does not mean, as some recommend, trying to stage-manage the emergence of a new political order and picking winners and losers in it. The extreme, very-high-cost U.S. attempt to do that sort of thing in the Middle East—the war and occupation in Iraq—should have taught us how dim would be the prospects for success and how counterproductive would be most of the things we could try.

One senior U.S. official appropriately observed about the current situation in Syria, “What is the end? That’s the dilemma. No one knows what the end is. So it’s all about mitigating the risks.” Because no one knows what the end is, it would be a mistake to be more activist in Syria in a way in which success would depend on one particular scenario playing out rather than another. For the same reason, as with Libya, it would be a mistake to start marking our scorecards soon as to what is a success and what is a failure.

Image: Freedom House

TopicsHumanitarian InterventionPost-Conflict RegionsChinaRussiaIraqLibyaUnited StatesSyria

Sliding Toward War With Iran

Paul Pillar

The closest things we have to consensus views on the likelihood of war breaking out with Iran rate such a war as unlikely in the near term, in the sense of a less-than-even chance. The most recent (i.e., last month) iteration of a poll of twenty-two experts done for The Atlantic (I am one of the “experts”) yielded an average probability for either the United States or Israel attacking Iran in the next year of 36 percent. Turning to those who put their money where their prognostications are, participants in the online prediction market Intrade currently rate the chance of a U.S. or Israeli airstrike against Iran sometime before the end of 2012 as about 33 percent. The most likely outcome of a situation, however, is not the only outcome we should worry about, and we should especially worry about outcomes that, although less likely, would be especially damaging to our interests. A former vice president of the United States once said that even if there were only a 1 percent chance of a really bad thing happening, we need to work to prevent it from happening. He was wrong in his dismissive approach toward probabilities. But the 33–36 percent range represents far more likelihood than 1 percent, and war with Iran would be a really bad thing for the United States.

The current danger of a war derives from a mix of factors that could slide Iran and the United States toward combat even if senior decision makers in neither Washington nor Tehran want a war. (These factors no doubt underlie a significant increase this month in the likelihood of war as measured by the Intrade market, which in late June had dropped below 20 percent.) One factor is the combination of Western economic warfare against Iran in the name of getting Iran to make concessions on its nuclear program, combined with the failure of the West, despite its stated objective, to use its economic sanctions as leverage to accomplish that very goal. The result is an impression of stalemate leading promoters of a war to pronounce that “diplomacy has failed.”

Another factor is the chance of of an accidental altercation involving U.S. and Iranian forces in the Persian Gulf. That chance increases as the United States beefs up its naval forces in the Gulf with an additional aircraft carrier and conducts additional exercises there. U.S. naval officers have reported that insofar as they have communications with Iranian counterparts at sea, the latter appear to behave professionally and do not seem to be looking for a confrontation. But the more military activity there is in the area, the greater is the risk of an incident that stems from nervousness or faulty communication (or even intentional action by a hot-headed low-level Revolutionary Guard commander) and then spins out of control.

A reminder of how faulty communication and nervousness on the U.S. side can produce an incident was the firing by the U.S. Navy at an Indian fishing boat earlier this week off the coast of the United Arab Emirates. This incident also recalls the one in 1988 in which the crew of another U.S. warship in the Persian Gulf, also mistakenly imputing hostile intentions, shot down a civilian Iranian airliner. That tragedy killed 290 persons and led Iranians to conclude that it was an intentional act by the United States. The casualties in this week's incident were limited to one Indian fisherman killed and three wounded, but if an Iranian vessel had been involved the chance of escalation would have been significant.

Then there are developments involving the prime mover of heightened tension with Iran: Israel, which wants to preserve its regional nuclear-weapons monopoly and in the meantime has been stoking the Iranian nuclear issue to crisis-level heat and promoting it as the “real problem” of the region. Political events within Israel are tending to keep the Netanyahu government on its bellicose path. A short-lived coalition with the centrist Kadima party broke up amid disagreement over extending conscription to the ultra-Orthodox, and the government has returned to being a more purely right-wing enterprise. The break-up with Kadima may make an Israeli election come sooner than it otherwise would have, but there is no alternative in sight anyway with a decent chance to unseat Netanyahu.

In this environment comes the bus bombing in Bulgaria that killed five Israeli tourists. Netanyahu and other Israeli officials swiftly pinned blame on Iran and its Lebanese Hezbollah ally, although actual responsibility for the attack is still murky. The Bulgarians identified as the bomber a Swedish-Algerian who was incarcerated at Guantanamo before being freed in 2004 and has also reportedly spent time in Saudi Arabia, Pakistan and Afghanistan. Swedish officials have denied he is the bomber.

Notwithstanding continued uncertainty about responsibility for the bombing in Bulgaria, we ought to pay attention to Netanyahu's blurt that “This is a global Iranian terror onslaught and Israel will react firmly to it,” for two reasons. One is that Iran may indeed be behind the attack, and it would be unsurprising if it is. Israel has been waging a covert war against Iran that has included, among other actions, multiple assassinations of Iranian scientists. The Israeli attacks have entailed terrorism in the purest sense of the word, in that they have been designed not just to hurt directly the Iranian nuclear effort but to intimidate other scientists from working for the program. Iran evidently has tried to respond with attacks in foreign countries against Israeli diplomats with methods that, to make the tit-for-tat nature of the terrorism explicit, mimicked the methods the Israelis used. The very limited nature of the Iranians' success makes it plausible that they may have decided to go for an Israeli target that was even softer and less protected than a diplomat.

The other reason to pay attention to Netanyahu's bellicose response is that he may be looking for excuses to up the ante and the heat no matter who ultimately turns out to be responsible for the attack in Bulgaria. The current uncertainty about responsibility may even be a motivation to act sooner rather than later, before the investigation of the bombing might start to point in a direction other than Iran. His action may take the form of an escalation of Israel's terrorism campaign, which would further increase the danger of a covert war becoming an expanding overt one.

Although the chance of war with Iran gets attention among policy cognoscenti in Washington, the danger is underappreciated among the American public. The presidential election campaign isn't helping and instead is making things worse. President Obama apparently has opted to try to keep a lid on the Iranian nuclear issue through election day rather than resolving it. Mitt Romney, in trying to score points against the president, only tells us that we ought to be more afraid of an Iranian nuclear weapon than a new war in the Middle East. This raises the question of how such fear, of a still nonexistent weapon in the hands of a second-rate power on the other side of the globe, is consistent with the vision of a proud and powerful America that one hears in the rest of his message.

The danger of a war needs to be taken seriously. That means using those sanctions we have piled on Iran as leverage, which is not how we have used them so far, to make possible a nuclear agreement with Tehran. It means emphasizing communications and procedures in the Persian Gulf that will minimize the chance of an escalation-prone incident, rather than merely bringing in more sabers and rattling them more loudly. And it means distancing and dissociating the United States as much as possible from destructive and destabilizing actions by Israel.

Image: davidhighbury

TopicsDomestic PoliticsElectionsSanctionsNuclear ProliferationTerrorism RegionsIsraelIranUnited States

The Illusions of Secretary Clinton's Trip

Paul Pillar

There is nothing new, of course, in disconnects between a polite veneer of international diplomacy and significant conflicts of interest between governments. Nor is there anything new in a lack of correlation between happenings on the surface and the extent to which an underlying relationship is cooperative or conflictual. But on Secretary of State Clinton's just-completed Middle East trip, the lack of correlation was especially marked.

In Egypt, the secretary's motorcade was pelted with shoes and tomatoes. Although it was not entirely clear what the anger encompassed, the protestors evidently were a combination of Christians wary of anyone having dealings with an Islamist government and some die-hard supporters of the deposed Hosni Mubarak. Clinton responded with aplomb, later expressing as her only regret that the protest was a waste of good tomatoes. Despite anger in the street, current bilateral frictions between the United States and Egypt do not extend much beyond consequences of the Egyptians' sharp differences among themselves, making it difficult for any outsider to do business with any one Egyptian element without offending other Egyptians. There is much commonality of interest between the United States and each of the major Egyptian political elements. President Mohamed Morsi is the product of a free electoral process that was missing from Egypt for decades and that the United States has rightly endorsed and supported. The military brass, although currently standing in the way of a fully representative democracy, nonetheless stand for other things also important to the United States, including domestic stability and a continued strong U.S.-Egyptian security relationship.

By contrast, when Secretary Clinton was in Israel there were no flying tomatoes or shoes. Also by contrast, the decorum and friendship on the surface masked severe problems in the relationship and serious conflicts of interest. At the center of the problems—partly because of the pervasive effect on U.S. relations and standing through the region—is the Israeli retention and colonization of occupied territory seized in war. Regarding democratization in nearby Arab states such as Egypt, Israel has views different from those of the United States, for reasons unique to Israel and that Israel has largely brought on itself through its handling of the Palestinian issue. Israel also is the source of another major regional problem for the United States, turning a long-term issue of Iran's nuclear activities into a preoccupying crisis by threatening to start a war.

The current Israeli government occasionally has let the conflicts of interest surface in ways that have tested the patience of U.S. leaders and their ability to maintain the decorum. When the Israeli prime minister visited Washington, he presented the spectacle of lecturing the president of the United States at a White House photo op. When the vice president of the United States visited Israel, he was insulted by having the Israeli government pick that moment to announce its latest expansion of settlements in the occupied territories. This time, the Netanyahu government pursued the same objective in ways that would not be seen as an open insult. Over the weekend we learned that Netanyahu's government has quietly agreed to subsidize the construction of more than five hundred new Israeli homes in the West Bank, notwithstanding a promise earlier this year to deny such subsidies.

Despite all the conflicts of interest, it has become de rigueur to exude harmony in U.S.-Israeli relations. Much commentary in Washington treats harmony in this relationship as if it were an end in itself, which it isn't. Amid a U.S. election campaign the exuding is all the more de rigueur. Secretary Clinton's trip to Israel will be followed in a couple of weeks with a visit there by Mitt Romney, and there will be much gauging of whose visit was friendlier.

During the past three and a half years, Hillary Clinton has thrown herself into the job of secretary of state with much energy and dedication. She has well earned a rest, if she wants one, when she leaves the position. She probably especially will welcome no longer needing to bite her diplomatic tongue when the surface of international diplomacy is sharply at odds with the underlying reality.

Image: IsraelMFA

TopicsDomestic PoliticsElectionsPost-Conflict RegionsIsraelEgyptIranUnited StatesPalestinian territories

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).


TopicsDomestic PoliticsSanctionsNuclear Proliferation RegionsIsraelIranUnited States