A “long-view” assessment of 2009

As we approach the end of 2009, I find myself trying to assess how America as a nation is doing. In the short term, of course, there are lots of things to complain about, but in another ten or twenty years most of these issues will have been forgotten – indeed, many may be forgotten by next year. What really interests me is how we are doing in the long view – how historians will assess us in fifty or a hundred years with the benefit of 20-20 hindsight.

Two things make such an assessment difficult today. In the first place, we are still immersed in many of the key events. We don’t have either the disinterested perspective nor all the information that later historians will have. Later historians, for example, will know how Afghanistan and Iraq “turned out” in the end, and that will shape their assessment of how well we did. Second, it is hard to compare across decades, because the world is growing ever more complex. Harry Truman’s world, for all its difficulties, was significantly less complex that the world Barak Obama faces. Today’s world scene has more significant players, and more complex interactions (largely because of faster and better communications).

Still, looking back over the last half century, America’s government handled World War II pretty well, and the aftermath brilliantly with the Marshall Plan. And America handled the Cold War reasonably well, with the possible exception of our muddled policies in Vietnam. Throughout that period, America’s economy and productivity flourished, and we made significant social advances in areas such as civil rights and women’s issues, among others.

It does seem to me however that we have not handled things nearly as well over the past few decades:

• Iraq and Afghanistan, it is now clear, were handled poorly by the Bush administration, and there is no clear evidence yet that the current administration is doing any better. And it is remarkable how Pakistan has managed to milk our government for over $10 billion in aid to fight terrorists over the past decade, while elements within the ISI (Pakistan’s own security service) continue to support the Taliban and its al-Qaida allies – probably with our own aid money.

• Attempts to limit nuclear proliferation, by both Republican and Democratic administrations, have largely failed in India, Pakistan, and North Korea and are even now failing in Iran. It is remarkable how North Korea and Iran, two relatively minor powers, have managed to stall, deceive, outsmart and outplay our government at every turn for decades now. North Korea, in particular, has managed to blackmail the West repeatedly into supplying it with food and oil, without giving away anything of value itself.

• We clearly missed an opportunity, after Communism fell in the Soviet Union, to entice Russia join the Western World as a full and proud democratic member, and are now faced with a resentful and increasingly authoritarian Russia intent on reclaiming its pride and sphere of influence.

• We have been led by well-meaning but unrealistic government policy (subprime mortgages to encourage homeownership among those who can’t really afford it) into a painful recession from which we are just now beginning to emerge, and we have accumulated a truly terrifying national debt which will have to be reduced someday either by higher taxes or soaring inflation, or (more likely) both.

• We have two entitlement programs in place (Social Security and Medicare), which are on a track to bankrupt the nation within a few decades. As of the end of 2009, the unfunded liabilities of these two entitlement programs totals about $107 trillion dollars – about seven times the size of our entire economy.

• We have lost credibility on all sorts of issues among both our allies and our foes, by making promises we don’t keep and threats we don’t follow up, by not matching our deeds to our rhetoric, and by lecturing others about high ideals we don’t follow ourselves.

Now of course human nature hasn’t changed over that period – there is no doubt just about as much greed, hubris, ego, and stupidity now as there was fifty years ago. Our culture may have changed a bit, but I don’t see convincing evidence that we as a nation are that much less materialistic or selfish, or that much wiser, than we were fifty or a hundred years ago. People still subscribe unthinkingly to all sorts of political and social ideologies, just as they always have, and these ideologies still cloud people’s thinking, just as they always have. So what has changed?

I’m inclined to attribute what I see as America’s poorer performance over the past few decades primarily to five factors:

1) A political system that increasingly rewards fund raising at the expense of demonstrated governing skill. These days to win a national political office requires a great deal of media exposure, and that costs lots of money, and so candidates who can raise lots of money have an almost overwhelming advantage. Not surprisingly, those corporations, industries, unions and political action groups that supply the candidate’s money expect favors in return, and get them. Money has always influenced politics, but perhaps never more so, or more directly, than it does now.

2) A political system staffed largely by people who apparently don’t have a good liberal education. There has been a notable lack, in recent decades, of administrations that appeared to be acquainted with the lessons of history, or the realities of basic economics, or that appeared to have any grasp of the cultures of either their allies or their foes. Too often our national policies have been shaped by the ideology or mythology of the administration in power, rather than by realistic and pragmatic considerations.

3) A political system largely staffed and advised at the upper levels by an incestuous insider elite based largely in East and West Coast academia, Wall Street, and corporate executive offices. Of course nations are always led by ruling elites – indeed our founding fathers were just such an elite of wealthy landowners – and the ruling elites quite naturally always look out for their own interests first. Nonetheless, there is always a danger that the ruling elite, talking almost exclusively to themselves, will increasingly drift out of touch with the nation they rule.

4) A government grown too big and unwieldy to function well. Every new agency or department or program that is created creates yet another turf to be fought over and another budget to be battled for and another constituency bent on self-perpetuation at any cost. The stories of agencies which refuse to share data or resources with their “competitors”, or which actively subvert the work of “competing” agencies are legion. By now the government is so large that Congress hasn’t the faintest idea what is happening to all the money they appropriate every year for the various agencies – with the result that billions or perhaps hundreds of billions are wasted for lack of oversight.

5) A voting population that can be too easily bought with favors paid for by taxpayer money. In the end, we the voters elect the key figures in each administration, and if our votes can be so easily bought with promises of government handouts without stopping to ask who will pay for this in the end, we will inevitably suffer the consequences.

Is any of this reversible? Not easily, but there are a few things I can think of that might help:

1) The imposition, by a constitutional amendment, of a balanced budget requirement on the federal government – a requirement that the government, over a rolling span of years (say 5 years, to give the Federal Reserve some flexibility) can’t spend more than it takes in. 39 states and Puerto Rico already have such requirements. The Federal government ought to also have such a requirement.

2) A constitutional amendment imposing term limits in Congress – perhaps a lifetime maximum of four terms for a House member and two terms for a Senator (not necessarily consecutive). This would force more turnover and bring in more new blood, and new thinking.

3) An absolute prohibition on any Congressman, President, or government official in the senior executive levels from ever lobbying for any organization, union, or corporation after they leave government service. This does not prevent them from joining a lobbying agency or corporation and advising on lobbying – but it would prohibit them from participating directly in the lobbying.

4) A constitutional amendment that limits the national debt in such a way that Congress can’t bypass the limit. There is a legal debt ceiling in place now, of course, but Congress routinely votes to increase it (five times in the past two years), so in fact there really isn’t an enforceable debt ceiling in place.

The absolute maximum Federal debt ought to be stated as a proportion of the annual GDP (say 40%), and contain language that forces the government to reduce the debt each year by some minimum amount (say 1%) if it exceeds a trigger level (say 30%) until it is again below the trigger level. (The Federal debt is currently at about 80% of annual GDP, and is expected to climb to about 150% of GDP over the next decade.)

Constitutional amendments can be proposed in several ways (See article five of the U.S. Constitution). The simplest way is by a two-thirds vote of both Houses of Congress, after which the proposed amendment must be ratified by three-fourths of the states. But of course Congress will never propose an amendment that limits its own power or prerogatives, so the amendments proposed above will have to be initiated by the legislatures of two-thirds of the states requesting a constitutional convention to consider these amendments. That means the battle will have to be fought at the state levels first.

Steps such as these would at least dilute the influence of the in-group elite by forcing more turnover and putting limits on the money they can appropriate without finding balancing sources of revenue. I don’t know what would ensure that we get wiser, more liberally-educated people into our senior government positions, nor what might make voters less gullible about political promises and handouts.

What we have all suspected....

That Umar Farouk Abdulmutallab could get aboard a US-bound airplane with an explosive device last week is hardly a surprise. Most of us who travel have long since come to the conclusion that airport security is an expensive exercise in bolstering public confidence, not an effective deterrent to serious terrorists.

But perhaps it was a bit of a surprise that some nine years after 9/11, the various government intelligence agencies, supposedly welded together under the "Homeland Security" department into a single efficient system, are still obviously dysfunctional, inefficient, and highly error-prone. The revelation that the British had him on a no-visa list, and even his father had alerted American authorities in Nigeria last month about his son's strange behavior, but still the American intelligence system couldn't respond to the warnings, is a worrying sign.

It seems to me yet one more symptom of a government more concerned with appearances than with substance (just as with the health bill, for example).

Recommended: Power Rules

Despite being the sole global superpower, American administrations in recent decades have been repeatedly thwarted, frustrated, and out-maneuvered by minor powers like North Korea and Iran. Leslie Gelb, a past president of the Council of Foreign Relations and a sometime senior official in the State and Defense departments, argues that “Power rules, still, and there still are rules on how best to exercise it”. I strongly recommend his new book “Power Rules”.

Recent presidents of both parties have all too often issued empty threats and followed policies which have sharply reduced our credibility among both our friends and our foes. Recent presidents of both parties have often subscribed to unrealistic ideological views, from President Carter’s naïve trust in the essential “goodness” of other nations (painfully corrected by events in Iran) to President Bush’s naïve belief that he could change the cultures of the Middle East in a few years (painfully corrected by the insurgency in Iraq). Thus far, President Obama’s “open hand” approach has produced highly favorable press, but few visible tangible results from Russia, China, North Korea, or Iran.

Gelb argues for a realistic use of power, both “hard” power and “soft” power, and points out that neither is effective without the other – that is, there is no “soft” power unless there is at least the looming threat of “hard” power in the background, while on the other hand the use of “hard” power can often be avoided if we don’t force foes into a corner where they have nothing to lose by resisting our demands.

Gelb also explores the increasing importance in today's world of "economic power", as opposed to the more traditional military power. Economic power can also reshape the actions and policies of other nations, but it operates much more slowly than military power and has to be allowed the time to have its affect.

This is a very good book, and a good counter to all the various unrealistic “ideologies” on the political left and right which have lead us to follow so many counterproductive foreign policies in recent decades.

International relations is at best a highly complex game, in which even experts often make mistakes. But it would certainly improve our odds if our senior government officials understood some of the lessons of history.

Recommended: The Hardest Call

As usual, David Brooks has about as even-handed and dispassionate an assessment of the current health care debate as anyone I can find. His piece The Hardest Call in today's New York Times is an excellent summary of the fundamental pros and cons of passing the current health care bill.

Of course, the bill currently being debated in the Senate is not the real bill. The real bill that will be voted upon will be the "manager's amendment" which Harry Reid and a few others have been working on privately and will present today or tomorrow, and which most of the Senate has not even seen. So in fact all the contentions public debate has been largely a sham, since it hasn't been about the bill that will come up for vote. Moreover, if Reid holds to his schedule of getting a vote next week before Christmas, most of the Senators voting will not have had time to read through the thousand or so pages of the final bill, and will in essence be voting blind.

So much for bipartsionship

So the only truly bipartisan amendment offered to the health care plan being debated in the Senate was an amendment to allow importation of drugs from Canada and a few other countries where drug makers often sell the same drugs they sell in the US at cheaper prices. This was an issue President Obama strongly supported in his campaign. It would have provided a powerful incentive for drug companies to level out their prices between nations. It would have cut the cost of health care for all of us.

So what did the Senate do? It defeated the amendment under pressure from the pharmaceutical industry. So much for campaign promises. So much for bipartisanship. So much for promises that the health care bill will reduce our health care costs. So much for claims that the Republicans are the party owned by big business and the Democrats are the champions of the little guy.

I was so fed up with the Republicans when Bush left office that the Democrats might have enlisted me as a staunch Democrat for the rest of my life. But the performance of this administration over the past ten months, and especially of the Democratically-controlled Congress, has been so abysmal that they have lost me for good. I would rather have the narrow-minded, priggish, right-wing Republicans in power than this group - and that is saying a lot! Bad as the Republicans were -- and they were bad -- they weren't as dangerous to the nation as this group of free-spending liberal ideologues are. No nation in history has survived the debt burden as a proportion of GDP that they are placing on us, and I doubt we will survive it either.

Another dissent to the health care legislation

Richard Foster, the chief actuary at the Centers for Medicare and Medicaid Services (part of the government's Health and Human Services Agency), has issued a report on the probable effect of the health care legislation currently being debated in the Senate. You can read the full report here.

Like the recent Congressional Budget Office report, it finds the current legislation, far from reducing health care costs, will almost certainly increase them. The new report estimates that national health expenditures would grow about $234 billion from 2010-2019 under the bill, 0.7 percent more than if nothing were done.

Insanity???

The 2009 Social Security and Medicare Trustees Reports show the combined unfunded liability of these two programs has reached nearly $107 trillion in today's dollars! That is about seven times the size of the U.S. economy and 10 times the size of the outstanding national debt. Of these, Medicare's future liabilities total more than $89 trillion..

In the face of this, the Senate is debating expanding Medicare to cover people as young as 55, which will make the funding problem even worse! This is unbelievable! Have the Democrats taken leave of their senses?? Are they determined to have a one-term president? Have they lost all sight of fiscal reality??