issue: Foreign Policy & Defense

The Defense Budget Sleight of Hand That’s Costing You Billions

Posted on by The Progressive Policy Institute

Look, I get it. If you’re not a budget wonk, I can understand how you might not care about this stuff. But if you’re a progressive and you’re concerned about the Tea Party destroying the EPA for no good reason, then that’s reason to pay attention.

I’ve written a policy memo about something else that is crucial to understand if we want to even the discussion of getting Defense spending under control: it’s simply vital that we end the practice of supplemental war funding bills.

Wait! Wait! Don’t fall asleep. Seriously. We’ve wasted $200 billion over the last ten years through a little-discussed system of back-door Pentagon budgeting, which essentially funds the stuff on DoD’s wish list by falsely calling them “emergency war necessities.” Why, for example, did Congress give Don Rumsfeld an $11 billion slush fund to spend as he pleases without any Congressional oversight?

We have to end this systematic abuse of your taxpayer dollars — start reading here to find out how.

Read the policy memo

A Serious Man

Posted on by The Progressive Policy Institute

As political handicappers weigh the impact on next year’s elections of Senator Jim Webb’s decision not to seek a second term, this much is certain: His departure will leave the Senate a less interesting place.

Webb is an original: Annapolis graduate, decorated Marine veteran of Vietnam, acclaimed novelist, Secretary of the Navy under Ronald Reagan and, following his improbable 2006 victory, Democratic Senator from Virginia.

Improbable not just because he started way behind, but also because he had previously been a Republican; because this erstwhile warrior rode a tide of anti-war sentiment to victory; and, because he is anything but a natural politician.  A private, self-contained man, Webb does not lust for the limelight or feed on public adoration.  He doesn’t like to press the flesh or ask fat cats for money. He is essentially a writer whose political model was the late intellectual-turned-legislator, Daniel Patrick Moynihan.

While marching to his own beat, Webb has quietly made his mark in the Senate over the past four years. He successfully pushed an expansion of G.I. Bill-style benefits for veterans, and drawn attention to an issue that isn’t on the nation’s political radar but should be: America’s overstuffed prisons and indiscriminate sentencing policies that lock up too many non-violent offenders. Following his own passions, Webb has specialized in foreign affairs, focusing especially on East Asia.

Also like Moynihan, Webb’s outlook has been shaped by a strong ethnic consciousness. Just as Moynihan drew on his Irish background in his studies of the ethnic melting pot, Webb, in Born Fighting and other books, has chronicled the Scots-Irish experience in America. Settled on the America frontier, Scots-Irish Protestants pushed relentlessly westward, battling Indians (and Mexicans) along the way. They form the core of a genuine warrior culture that, argues German writer Josef Joffe in Uberpower: the Imperial Temptation of America, has mostly disappeared from Europe but remains a key element of American exceptionalism.

Webb’s departure will be a significant political loss for Democrats, but not because it may put his Senate seat in jeopardy. More fundamentally, Webb is a rarity in today’s contemporary Democratic Party: a leader with an intuitive feel for the interests and values of white working class voters. Once the mainstay of the progressive New Deal coalition, their defection to the Republicans led to a generation of GOP ascendancy in national politics.

More than most Democrats, Webb has thought hard how about to win them back. He has chided his party for exhibiting anti-military attitudes, and for pushing economic policies that favor elites who profit from globalization to the detriment of working families, whose incomes have stagnated as good jobs have vanished over the last two decades. Bravely, he has taken on the “diversity” industry that promotes group preferences in hiring, government contracting and college admissions, even for recent female and minority immigrants who can by no stretch of the imagination be classified as victims of U.S. racism.

As it happens, the modern Democratic Party emerged under Andrew Jackson, America’s first Scots-Irish President. The “democracy” as it was often called was the party of ordinary people, while the Whigs represented economic and social elites. Much of middle America now feels estranged from the party of the people.

That’s an existential dilemma for progressives, not just a political problem. Jim Webb understands that, which is why I’m sorry to see him go.

Why The Middle East Needs Economic Opportunity

Posted on by The Progressive Policy Institute

Uprisings across the Middle East have exposed the futility of America’s Faustian bargain with “moderate” Arab despots. Whatever happens in Egypt, it’s time for the United States to switch course and throw its weight unequivocally behind popular aspirations throughout the region for political freedom and economic opportunity.

No doubt this will be risky: If friendly autocrats go down, who knows what will take their place? Already there’s chortling in Tehran, because the fall of pro-western rulers could tilt the regional balance of power toward Iran and its satraps, weakening U.S. influence and further isolating Israel. For American strategists, however, such risks must be measured against the enormous costs of perpetuating a rotten status quo in the Middle East.

U.S.-backed regimes are far from the region’s worst, but they have contributed to the dismal conditions – stunted political and economic development, systematic abuse of human rights, endemic nepotism and corruption – that breed popular discontent and, at the extreme, the violent ideology of radical Islam. Washington’s support for authoritarian rulers has yielded neither lasting stability nor moderation, though it has compromised our own liberal values and engendered anti-American sentiment on the street.

Now, amid rising popular demands for change, America should aim not at stability, but at transformation in the Middle East. We should side with the young, civic activists and political reformers who want to throw off strongman rule; knock corrupt elites from their privileged perch; bypass central bureaucracies that stifle enterprise and dole out economic favors as a means of social control; empower civil society and women; and, in general, open Arab and Muslim societies to the modern, interconnected world.

Given our embrace of realpolitik in the Middle East, America doesn’t have a lot of credibility in the eyes of people now protesting in the streets of Cairo and other Arab capitals. But while our influence on political developments may be limited, there’s nothing to prevent the United States from addressing the economic frustrations that feed today’s revolts.

As PPI has documented in a series of policy reports (see here and here), the Middle East is the great outlier in today’s system of economic globalization. If you take out oil, the region’s share of world trade has remained strikingly small (about two percent of farm and manufacturing products), even as its population has nearly doubled over the past three decades. Exports are up in some countries, including Egypt and Pakistan, but the region as a whole attracts very little foreign investment. Poverty rates remain high – in Egypt, just under half the population is poor – and, according to the International Labor Organization, the Middle East has world’s highest unemployment rate: 10.3 percent compared to a global average of 6.2 percent.

This picture of economic stagnation is particularly grim for the young. Fully a quarter of them can’t find work. Little wonder that, as young men pour out of schools and universities into barren job markets each year, some are susceptible to Islamist extremists who offer them not only pay and adventure, but also a compellingly simple account of who is to blame for their misery – corrupt rulers in cahoots with the infidel West.

One practical way the United States can counter the radical narrative is to champion economic freedom and prosperity in the Middle East. The principle instrument here is trade and investment, rather than development aid. What these countries need is economic reforms that facilitate their integration into global markets, not wealth transfers from rich countries that end up lining the pockets of corrupt elites. To spur reform and growth, President Obama should ask Congress to pass a massive tariff-reduction bill based on the successful precedent of the Africa and Caribbean free trade agreement. A Greater Middle East Trade Initiative would provide the levers for lowering barriers to trade and investment in the region, promoting financial transparency, encouraging all countries to join the World Trade Organization, and removing obstacles to individual enterprise.

The nexus between trade and investment and economic reform is critical. As Peruvian economist Hernando De Soto has shown, massive state bureaucracies and bad laws smother entrepreneurship and drive a lot of economic activity underground. In Egypt, more people work in the underground economy than in either the private or public sectors. His studies also show that a low-income entrepreneur has to negotiate with scores of government agencies to start a business, and it years to get clear title to land.

Of course, Washington should press harder for political reforms and fair elections in the Middle East as well. But many in the region simply don’t trust Washington to embrace democracy if it produces outcomes we don’t like. By focusing on poverty, unemployment and jobs, the United States can work around such suspicions. Making life better for ordinary people is the best way to advance U.S. interests in the Middle East.

Nine Questions About the Muslim Brotherhood

Posted on by The Progressive Policy Institute

Events unfolding in Egypt are cause both for celebration and concern.   Extremely important questions for American national security are at stake in the orientation of the Egyptian government that emerges from this period of upheaval.  A fundamental question looms large: Will the Egypt that emerges be a reliable US ally and a force in for peace and security in the Middle East?

Key questions surround the Muslim Brotherhood, a well-organized force in Egyptian society. Though reformist factions exist within the Muslim Brotherhood’s leadership, the group’s stated opinions on issues of sharia law, women’s rights, relations with Israel, and the legitimacy of terrorism should give American policymakers pause.

As we begin to assess the Muslim Brotherhood, here are nine questions we should all ask of and about the Muslim Brotherhood and its allies:

1. Can the Muslim Brotherhood participate in a government where Egypt continues its obligations to Israel under the Camp David Accords? Could it lead such a government?
Muslim Brotherhood party leader Mohamed Ghanem said on Iranian TV that Egypt should stop selling gas to Israel and prepare the Egyptian army for a war with the Jewish State, echoing the 2010 declaration of Muslim Brotherhood Chairman Mohammed Badie that the Camp David Accords violate the laws of Islam and have “lost all credibility.”­  Likewise, a Brotherhood leader told NHK TV this week that as soon as there was a post-Mubarak government it must break peace with Israel.

2. Can the Muslim Brotherhood lead or even be part of a government that continues extensive counter-terrorism cooperation with Israel and the United States, as conducted by the last government?
In 2008 Muslim Brotherhood Supreme Guide Muhammad Mahdi Akef in 2008 declared that that violence against civilians of the kind practiced by Osama Bin Laden is justified against “occupiers” and opponents of Islam.

3. Under the Muslim Brotherhood, would the Egyptian government continue to fulfill Egypt’s international obligations and keep the Suez Canal open for all international shipping, including that of America and Israel?

4. Can the Muslim Brotherhood participate in an Egyptian government that maintains the Western-backed closure of the Hamas-controlled Gaza Strip? Could it lead such a government?
In June 2010 Muslim Brotherhood Guidance Bureau member Essam El Erian announced that the border of the Hamas-controlled Gaza Strip should be opened.

5. Would the party sit in a coalition government with female cabinet ministers? Could it lead such a government?
In 2008 Muslim Brotherhood Executive Bureau member Mahmoud Ghozlan insisted that “women and non-Muslims don’t have the right to lead or govern Muslim states,” echoing the sharia-based gender segregation in all sectors of life called for by Muslim Brotherhood founder al-Banna.

6. Given Iran’s support of the Muslim Brotherhood’s sister terrorist organization Hamas, under the Muslim Brotherhood, would Egypt participate in the international sanctions regime against Iran?

7. Does the Muslim Brotherhood intend to push Egyptian lawmakers to adopt Koran-based law for Egyptian Muslims and former Muslims, including mandating death for apostasy?

8. Does the Muslim Brotherhood intend to push Egyptian lawmakers to adopt Koran-based law in regard to Egyptian non-Muslims, including denying full legal recognition to religious minorities such as Copts?
In a 2008 interview by Supreme Guide Muhammad Mahdi Akef insisted that Copts could not lead Islamic states such as Egypt.

9. Would a Muslim Brotherhood government seek to execute homosexuals as do other sharia-guided states?
In a 2008 interview Muslim Brotherhood Executive Bureau member Mahmoud Ghozlan emphasized that homosexuality needed to be outlawed.

Can Mubarak Follow South Korea’s Path?

Posted on by The Progressive Policy Institute

As the world holds its breath to learn if the Egyptian people’s amazing struggle for democracy ends with a breakthrough or a bloodbath, President Hosni Mubarak would do well to consider the South Korea option.  Ultimately, Korea’s dictators and democracy were both winners.

Like Egyptians, South Koreans endured decades of American-backed dictatorship.  In the spring of 1987, Korea’s military government held sham elections not unlike the ones held in Egypt last November. However, in both places, a combination of repression and rising expectations proved a combustible mix. If the actual trigger for Egyptians was the sudden overthrow of Tunisia’s dictatorship last month, Koreans drew inspiration from the “People Power” overthrow of Ferdinand Marcos in the Philippines the year before. Indeed, “Marcos” became a code word for Korean reporters to describe their own dictatorship.

As in Cairo today, student-led demonstrations drew hundreds of thousands into the streets of Seoul 24 years ago. Like Egypt’s Muslim Brotherhood, Korea’s Christians played a supporting role at the outset. After weeks of clashes and tear gas, on June 29 the government announced that a free and fair direct presidential election would be held within six months. Given that almost exactly seven years earlier, the military unleashed a crackdown that killed over 200 citizens, the question we must ask is, what had changed?

When facing persistent social unrest, all dictators invariably undertake a cost-benefit analysis of cracking down versus opening up. In 1980, Korea’s coup leaders correctly determined that there would be little or no cost for killing. Indeed, within months of wiping the blood off of his hands, General-turned-President Chun Doo-hwan was one of President Ronald Reagan’s first foreign guests at the White House. Later that same year, Seoul was awarded the 1988 Summer Olympics.

China reached a similar conclusion in June of 1989. After two weeks of martial law, the butchers of Beijing calculated that firing on demonstrators in Tiananmen Square would be of great political benefit and little cost. Indeed, foreign investment actually increased in 1990 and exploded thereafter.

Far from incurring any costs, China and Korea’s dictators were rewarded for their bad behavior. For the United States, the price was much higher. A generation of Koreans became virulently anti-American because of our support for a hated regime. Can the U.S. afford such blowback in Egypt?

In Korea in 1987, by contrast, not only were the demonstrations much larger than in 1980, but the Reagan Administration was now insisting that the Chun regime begin the transition to democracy. More importantly, Korean military leaders revealed later that they had considered a crackdown, but feared losing the Olympics if they had turned the streets of Seoul red.

Many pundits have declared that the United Sates is a mere bystander to the struggle for democracy in Egypt, powerless to shape the outcome. This could not be further from the truth. Not only does the U.S. provide $1.3 billion a year in foreign aid (largely to the military no less), but the U.S. is also Egypt’s leading trade partner.

Since last Friday, the Obama Administration has only hinted that future U.S. assistance could be linked to the government’s behavior. If he has not already done so behind the scenes, President Obama must not waste a moment to make it clear to Mubarak that if the Egyptian army opens fire on innocent demonstrators, U.S. aid stops and sanctions begin. Thugs will prove unequal to the task of quashing the uprising. If Mubarak still decides to clamp down, then it is time to reevaluate all U.S. overseas assistance. If we cannot shape outcomes in the country that is our second leading aid recipient, then it is time to conduct our own cost-benefit analysis.

If President Mubarak has time to read to the end of the Korean case, he might even fully embrace the decision to open up. Largely free and fair elections were held in South Korea in December 1987 as scheduled, but due to a divided opposition, the military’s candidate (and a leader of the previous coup and crackdown no less) managed to win the election. We will never know if there would have been a military coup had one of the opposition candidates won. Once a civilian was elected president five years later, Chun and his successor did briefly spend time behind bars, but they are now living out their days as elder statesmen.

Korea’s transition to democracy was conservative and gradual, but democracy was the ultimate winner. Korean legislators may still favor fistfights over filibusters, but Korea is now the most vibrant democracy in Asia. It is not too late for Mubarak to start Egypt down that path.

Three Lessons From the Chaos in the Middle East

Posted on by The Progressive Policy Institute

As the foreign policy community begins a reevaluation of conventional wisdom about the Middle East, an obvious consequence in the aftermath of events in Egypt, one of the many questions that will get revisited is how to incubate a Palestinian state. It would be a pity if that track escaped the same needed consideration, or proceeded without an eye towards the pressing lessons emerging, even as the riots continue to simmer and the dominoes continue to teeter.

If the chaos sweeping the Arab and Muslim world has shown us one thing, it’s that Arab regimes in the Middle East come and go. If it’s shown us two things, it’s that regimes in the Middle East come and go, and that when they go, there had better be healthy liberal, secular democratic opposition groups ready to enter the vacuum. Otherwise the result is what we’re seeing now in Egypt, where the choices are between hostile political Islamists on the one hand and, on the other, a reshuffled version of the same regime that’s been ruling the country for decades.

One lesson that needs learning, then, is that an Arab state without an organized middle class is not only doomed to failure, but ALSO that the most organized oppositional forces sweeping the Middle East are basically one-man-one-vote-one-time Islamism. It’s not enough to have a middle class, and one can’t wave a magic wand or sprinkle fairy dust to make it happen. A middle class needs time to develop, to breath, and to become a recognizable political bloc with recognizable political interests channeled through recognizable political parties.

And that’s exactly what Palestinian Prime Minister Salam Fayyad is attempting to accomplish in the West Bank. His economic initiatives, coupled with his institution-building programs, should not just be viewed as ways to increase the average Palestinian’s standard of living. More than that, they’re attempts to ground a future state in something like a civil society, the ultimate goal being to prevent a political vacuum from engulfing a future Palestinian government.

The Prime Minister knows that Hamas is ready to fill that vacuum and, having seen the creeping theocracy that is the Gaza Strip, he knows what the consequences would be if the Iran-backed terrorist organization ever succeeded.

The trick for the rest of us, of course, is to ensure that the process is allowed to play out – for the Palestinians and in Egypt – and that Fayyad’s efforts are allowed to become robust.

Economic peace should be allowed to take hold – and deeply encouraged – before political imperatives, lest still-fragile Palestinian institutions get overwhelmed and crumble.

And if we have learned a third thing from events this week – and more on this soon – it is that peace in the Middle East must be between institutions and societies, not simply with Arab political figures, whose future is far too uncertain across the Arab world for us, or our friends in Israel, to bet the farm on their survival.

Why We Are Watching This Clown

Posted on by The Progressive Policy Institute

I normally try to stay away from this stuff, but the latest Glenn Beck blaze of paranoia on Egypt is just too much of a train wreck to miss. In 12 terrifying minutes, Beck outlines the contours of a Middle East that is ON FIRE, and promises to devote the next several episodes to giving his viewers the whole TRUTH, the TRUTH that “has no agenda,” the TRUTH that the mainstream media doesn’t want to tell you.

“I’m not going to give you the two minute sound-byte,” teases Beck. “I’m not going to treat you like you’re a moron. I’m going to treat you like you really do want to understand what’s going on in the world.”

Okay, we all know he’s crazy. But what I keep trying to understand, every time I catch a glimpse of Beck, is why do 2.5 or 3 million people tune in to watch this guy every night? Clearly, he’s figured something out. And as amusing as it is to gawk at the loop-de-loops of insanity, there’s got to be some deep psychological nerves that he’s satisfying.

Let me offer three hypotheses:

  1. The puzzle-solving boost. The neuroscientist V.S. Ramachandran writes that “we are hard-wired to love solving puzzles.” In particular, we seem to most enjoy solving puzzles with sudden flashes of insight, “Aha” moments that give us a little flash of positive good feeling. This probably explains the appeal of conspiracy theories generally. Everybody loves a good mystery. And Beck’s most disturbing moments are kind of like that: he throws a bunch of oddly-sized puzzle pieces on the floor, and then promises to show how they will all fit together in an instant “aha” moment. It’s like puzzle-solving porn.
  2. The smarter than everyone else boost. What Beck is consciously doing is letting his viewers in on something exclusive, some privileged view of the world that allows them to feel superior to those who aren’t in the know. These are viewers who have probably spent much of their lives feeling intellectually insecure. But by providing a simple, secret explanation for what’s going on the world, Beck is peddling an ego boost.
  3. Anxiety needs some respect. Beck’s rants are fear-driven, and in that respect they must resonate with a sense of unease that seems to be plaguing too many Americans these days. But this is especially dangerous. Risk expert David Ropeik writes that “when it comes to perceiving and responding to danger, human brains are hard-wired to fear first, and think later.” Beck’s rants are fear-driven, and once the fear part of the brain is activated, the logic part of the brain just doesn’t function as well.

So, add it up, and what Glenn Beck is offering millions of anxious viewers is a chance to validate their fears and then illogically salve them by providing the psychological high of solving a puzzle that allows them to feel superior by being privileged to some secret, exclusive knowledge.

I’m not sure what the antidote is, but I’m guessing it’s not simply marginalizing Beck for his craziness, fun and ego-boosting as that may be. I do sincerely believe that the conspiratorial fear-mongering that comes out of the Beck empire is a serious, serious problem for our society, but it also taps into some serious psychological needs out there. More to think about here.

Let’s Get Pragmatic on Gun Control

Posted on by The Progressive Policy Institute

As the debate over gun law reform continues in the wake of Jared Lee Loughner’s shooting spree in Tuscon, the biggest challenge will be finding a pragmatic solution that both sides of the gun control debate can support, and still addresses the fundamental issues in a comprehensive fashion. After all, gun control has historically been one of the most contentious areas in American politics.

Typically, on the subject of reducing gun violence through legislation, the loudest voices can be divided into two camps. On one side, guns are considered not merely instruments of violent people, but as actually creating or perpetuating violence. This group tends to focus on prohibiting certain configurations of firearms in the hope that if certain types of firearms are banned, criminals will be unable to inflict as much damage per incident.

A recent example is Rep. Carolyn McCarthy’s (D-NY) recently introduced bill to reinstate the ban on extended capacity magazines. The ban would limit firearm magazines to holding no more than 10 rounds. While it is difficult to articulate a need for an extended magazine in any civilian application, as a practical matter, changing magazines takes less than two seconds. This is not really an effective way to prevent shooting sprees as demonstrated by Seung-Hu Cho, the Virginia Tech shooter, who had nearly 20 magazines on him and went through half of them before committing suicide.

The other camp believes that putting guns in the hands of more people will counter gun violence by enabling ordinary citizens to defend themselves against criminal attacks. This group tends to introduce legislation to ease restrictions on carrying weapons, concealed or openly, and has recently gone so far as to attempt to legalize students and teachers arming themselves on college campuses. Any amount of time spent on or near a college campus after hours will cause most people to question the wisdom of arming mass groups of college students.

A more pragmatic approach, centered on comprehensive background checks and screenings to keep guns out of the wrong hands is necessary. This approach is also largely supported by both sides. Such an approach, unlike the polar alternatives, can deal with the fundamental issue surrounding the Tuscon tragedy, which is that Loughner was able to purchase a gun to begin with. This is a man who was removed from his community college because his professors, administrators and fellow students recognized that he posed a danger. Yet, 5 months later he was able to legally purchase a Glock 19 pistol, passing a background check without being flagged.

We need to work harder to identify and properly deal with people who are so psychologically troubled or demonstrably criminally inclined that they pose a legitimate risk to society. The signs were there with Loughner. Why was he not subsequently submitted for a 72-hour evaluation? Why is there not a system in place where, if a person is deemed to dangerous to attend Algebra class, he is not automatically flagged as, at least pending evaluation, too dangerous to purchase or own a firearm?

We need to develop a framework of comprehensive background checks and screening that is consistent across every state and includes exposure to a qualified firearms trainer who can evaluate, among other things, an individual’s capacity to safely and responsibly possess a firearm.

A proper information technology backbone is desperately needed in order to make a comprehensive background check system work.

Currently, each state government is responsible for reporting information to the federal system as a separate operation. A ridiculous mix of proprietary, incompatible, and isolated information systems throughout the country slows down, or even prevents, the exchange of relevant information.

According to research by Mayors Against Illegal Guns, 18 states have reported zero citizens with mental health records that would preclude them from owning firearms to the national background check database. It is the 21st century, and there needs to be an open standard for all levels of government information systems that ensures interoperability so that manual information exchange is not necessary.

Such a system must allow hospitals, police departments, schools, states, counties and cities to enter information once, and have it immediately available to the federal system. Loughner would not have been able to pass a background check if the information had such a system been implemented.

As important as effective background checks are, however, no technological solution can surpass the effectiveness of human judgment. More comprehensive training and screening should be required before someone is able to purchase a firearm. This training should give a certified firearms instructor enough exposure to the applicant to provide sufficient opportunity to evaluate their potential for responsible gun ownership.

Had Loughner spent 5 days with a trainer, part of whose job it was to evaluate a person’s ability to responsibly own a weapon, perhaps his clear psychological instability could have been flagged and the gun would have been kept the gun out of his hands.

Most professional weapons training programs are designed, in part, to filter out those who are unfit to be armed. Such a requirement for civilian ownership could greatly reduce the likelihood that an unstable individual could legally purchase a firearm, independent of the severely limited background check system

If our legislative leaders focus on constructing this type of framework, both sides of the gun control issue can find something to be happy about. Proponents of gun control can be satisfied knowing that far more effort is going into ensuring that dangerous weapons, of any configuration, do not end up in the wrong hands. Proponents of the individual right to bear arms can be satisfied that, unless they exhibit behavior or criminal tendencies that should disqualify them from gun ownership anyway, their rights to bear arms will go unmolested.

While every tragedy cannot be prevented, common sense steps can be taken to keep dangerous weapons out of the hands of dangerous people. A framework that focuses on a solid system for comprehensive screening is a good first step.

What To Do As Egypt Transitions to Democracy

Posted on by The Progressive Policy Institute

Egyptian President Hosni Mubarak’s bizarre and wandering late-night address to the nation on Friday is almost certainly the beginning of his end.  Mubarak’s tone-deaf offer to reshuffle his cabinet is a ham-fisted attempt to address the Egyptian protesters’ concerns that only underlines his weakened position.  Only one of two paths seems open for Mubarak: that he clings to power through a campaign of violent and bloody repression, or that he flees Cairo to enjoy a luxurious retirement in Switzerland or Saudi. Given the army’s restraint thus far, thankfully the latter seems more likely.

The Obama administration deserves real praise for standing on the right side of history. Secretary Clinton’s remarks on the weekend’s talk shows struck an unambiguous tone as she called for the Egyptian people to “have the chance to chart a new future. It needs to be an orderly, peaceful transition to real democracy, not faux democracy.” Even John Boehner has praised the administration’s handling of the situation.

Should Egypt soon find itself staring “real democracy” in the face, what is the Obama administration’s next move?  The White House would do well to re-read a piece Shadi Hamid wrote for PPI in late 2008, particularly these sections:

Elevate democracy promotion through aid conditionality. The perception that America stands opposed to democratic openings in the Middle East must be challenged head-on so that Arabs and Muslims will begin to feel that they—rather than foreign powers—hold the keys to change within their own societies. The United States can start by articulating a regionwide contract whereby foreign aid is made explicitly conditional on a set of benchmarks, including respect of opposition rights, freedom of expression, and progress toward holding free elections, even if only on the municipal level at first.

Engage political Islam. Democratization will likely further empower Islamists, a reality that the United States must come to terms with. In order to re-establish credibility on democracy promotion—and just as importantly, to show that we have no gripe with Islam—we need to engage in a sustained dialogue with all religiously-oriented parties as long as they fulfill the conditions of renouncing violence and committing themselves to the democratic process. A new administration must begin by stating as a matter of policy that the United States is not opposed to dealing with non-violent Islamist groups and has no problem with parties of a religious character coming to power through free elections.

This would be coupled with the initiation of a U.S.-Islamist “dialogue,” designed to explore areas of tension and misunderstanding. As trust develops, the discussion would move toward the question of how moderate Islamists can help us and how we can help them. In exchange for supporting the political participation of Islamist parties in their respective countries, America would seek to extract certain “concessions” in return, including guarantees that they would respect vital U.S. interests, including standing peace treaties with Israel.

Obama and Human Rights in the Middle East

Posted on by The Progressive Policy Institute

Events over the last few weeks demand a reconsideration, if not a full-scale reevaluation of the wisdom of the Obama administration’s overall approach to democracy and human rights in the Middle East.

Facts are stubborn things, and the reality is that President Obama’s administration has now succeeded where President Bush never did. On his watch, Tunisia’s people rose up in protest over economic corruption and government repression and a dictator fled. The Arab world has a fighting chance at establishing its first true democracy.

At a minimum, those on the right who incessantly take credit wherever freedom blossoms need to grapple with that fact. But even more than that may be called for.

The Obama administration’s approach has not always been perfect, but it does appear, for the most part, rather consistent. And it does appear to have helped. It combines a steady rhetorical insistence on universal principles with an attempt, not always successful, to avoid lending its political support to either governments or protesters—betting on both and neither at the same time—event at times of crisis for regimes.

With events heating up in Egypt, the Obama Administration has done nothing to impede—and in fact has amplified—Egyptians’ calls for change.

With regard to events in Tunisia, Clinton was even more direct. Just days before Ben Ali fled the country, with his government grasping for support, she refused to throw him a rope, telling Al Arabiya: “We are not taking sides.”

Most importantly, the Obama administration has called on the governments of Egypt and Tunisia to respect the rights of peaceful protesters and to refrain from violence. This is by far the most valuable stance the U.S. can take in this moment of instability. An Tiananmen-style crackdown in Cairo’s Tahrir Square would have devastating consequences for Egyptians and Americans alike.

The toughest part has yet to come: Todays’s protests in Egypt are likely to be larger than the ones on Tuesday, and Tunisia has yet to consolidate anything resembling a democratic government. But so far, we have to commend the Obama administration’s approach to both Tunisia and Egypt.

Making Sense of the State of the Union

Posted on by The Progressive Policy Institute

For those of you out there still trying to make sense of the President’s State of the Union address, we at PPI have spent the whole day thinking about it.

Here are our insights:

  • Lee Drutman gave the speech a B+ for including some version of 8 of PPI’s 10 big ideas for Getting America Moving Again. He also assessed the impact the speech and the agenda it laid out could have on Obama’s 2012 chances.
  • Michael Mandel praised Obama for spending time on innovation, regulation, and jobs, but argued that in all three cases, he got his priorities upside down.
  • Jim Arkedis explained how foreign policy served as an underpinning for the address.
  • Ed Kilgore assessed the Republican response as little more than preaching to the choir on the limited idea of limiting government.
  • Mike Signer discussed the power of pronouncements.

State of the Union on Foreign Policy: Hardly an After-Thought

Posted on by The Progressive Policy Institute

Though the president failed to mention the words “foreign policy” until 80 percent of his speech lay in the rearview mirror, it very much served as the underpinning of the entire exercise.

“Winning the Future”, after all, is inherently a call to rise against two competitors: domestic political obstacles that restrain American growth and prosperity, and those nations who seek to best the American model of democratic free enterprise. In that sense, the best line of his speech–“We do big things”–was probably the most forceful testament to American greatness and world leadership of the Obama presidency. It was an effective reminder that despite the impasses our politics so routinely produce that our calling is at the head of the world’s pack, and for a damn good reason.

He used the buttress of China and India to raise the spectre of international competition, even though the notion of “competing” with with New Delhi and Beijing hardly boils down a zero-sum game.  But to gird Americans to tackle the huge tasks in their way, the frame was apt–other big countries are succeeding, and their models are sub-optimal.  We can be the best, he said, even though our democracy is messy.

Pundits may critique the speech for its lack of specific initiatives, that wasn’t really the point. Lofty rhetoric and inspirational moments fall well within the president’s balliwick, particularly at a political moment when a statement of first principles establishes the possibility of buy-in from erstwhile opponents. The specifics of regulatory reform, for example, may draw knee-jerk heckles from conservatives, but the idea of political cooperation that unleashes the power of American entrepreneurship and reestablishes American economic might on the world’s stage?  That’s rhetoric to start a conversation around.

When President Obama did get down to the foreign policy details, it was a mixed bag. Some, like Josh Rogin over at The Cable, took a cynical bent and criticized the president for glossing over some of the, er, finer details. Fair enough — I might disagree with some of Rogin’s “translations”, but he underlying point is that all isn’t going quite as swimmingly in the world of foreign policy as Obama makes it appear, and that’s about right.  Even if Obama’s foreign policy deserves, in broad strokes, a good amount of praise.

I wanted Obama to draw more of a line in the sand on foreign aid funding. With House Republicans set to eviscerate the foreign assistance line item in the federal budget, Obama could have used the moment to explain that if America is to remain numero uno in the world, it can’t retreat into isolationism. An America engaged with the world protects our security interests and advances our values, and engagement must be properly resourced.

And to conclude, I was pleasantly surprised at Obama’s forceful language on Tunisia and by subtle implication, the nascent rumblings in Egypt: “[T]he United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.”

Sure, platitudes come easy after a dictator has fallen, and Egyptians — as embodied in the “all people” tacked on the end — certainly wish Obama had been more direct. But in fitting with what I’ve said above, rhetoric is important and falls squarely within the president’s job-description.

Now let’s hope he has begun the process of cajoling our divided government into action.

State of the Union: The Power of Pronouncements

Posted on by The Progressive Policy Institute

This week, I taught the first class of a graduate seminar at Virginia Tech titled “Collaborative Governance.”  Our readings included a Foreign Affairs essay where the author confidently pronounced a number of pretty simple and strong directions for policymakers.  One of the students—who is earning a Ph.D.—became extremely frustrated.  “It’s just so simplistic!” she complained.  “There’s no subtlety, no context.”

So it goes with policy pronouncements, and so it often goes with the State of the Union.  People are often frustrated that they don’t hear the specifics about what government should do.

Yet, as we discussed in class, the fact remains that the broad, often simplistic pronouncements we heard last night still do push the ship of state in one direction rather than another.  And the fact also remains that the gulf between hard policy and the politics of policy can be perilous.

Democracy and governance held a place at once enthusiastic and general in the speech.  The commitment to the metaphysical promise of democracy was very clear:  “We must never forget that the things we’ve struggled for, and fought for, live in the hearts of people everywhere.”  About South Sudan, for instance, the president celebrated the outbreak of self-determination and freedom.

But questions were unanswered:  Here’s what President Obama said about Afghanistan:

There will be tough fighting ahead, and the Afghan government will need to deliver better governance. But we are strengthening the capacity of the Afghan people and building an enduring partnership with them.

“Need to deliver better governance” is the sort of generality that drives people like my frustrated student nuts.  The Karzai government is currently riven about whether to ratify the results of last October’s Parliamentary election and actually seat the government, with Karzai’s Attorney General trying to declare the results invalid.  The U.S. government’s position is that the elections should be upheld—but the overarching policy on how best to achieve governance in Afghanistan is still less than completely clear.

The allusions to the stirring outbreaks of democracy in Tunisia and Sudan were inspiring but equally indeterminate.  Of Tunisia, the president said, “[T]he United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.”

We support the democratic aspirations of all people—but the speech did not mention the extremely thorny issue of our traditional partner Egypt, an autocratic nation where a Tunisia-inspired democratic revolt was happening as the president spoke. That gap spoke volumes about the difficulty of translating broad aims into hard policy.

But the saving grace came in passages about American democracy itself.  In 2010, here’s what President Obama said about our system:

Democracy in a nation of 300 million people can be noisy and messy and complicated. And when you try to do big things and make big changes, it stirs passions and controversy. That’s just how it is.

This was striking both for its objectivity and its slightly defensive quality.  There was a slight but crucial reframing of a highly similar statement in this year’s SOTU:

And yet, as contentious and frustrating and messy as our democracy can sometimes be, I know there isn’t a person here who would trade places with any other nation on Earth.

Perhaps it was the Giffords shooting, or the sight of the Tunisian activists in the street, or the Congressspeople sitting together—but the statement brought tears to my eyes.  This year, President Obama’s observation of the messiness of American democracy became an article of pride.  This is a generality we can all embrace.

Howard Berman Stands Up for Foreign Assistance

Posted on by The Progressive Policy Institute

Foreign aid doesn’t have a constituency, and is often first on the chopping block, a maxim that is no different in the Tea Party Congress. In their haste to slash every penny of government spending (save the tough bits, of course), they have again failed to appreciate why foreign aid exists in the first place.

Unveiled last week was a Republican proposal to slash everything under the sun when it comes to aid: 84 percent of the USAID budget, the U.S. Trade Development Agency, the Woodrow Wilson Center, the USDA Sugar Program, economic assistance to Egypt, and many other programs.

To be sure, America needs a serious discussion about foreign aid reform. But we shouldn’t be questioning its very existence.

That’s why much credit is due to Rep. Howard Berman (D-CA), ranking member (and former Chairman) of the House International Relations Committee, who rises to stand in the path of neo-isolationism:

We all remember the period when the United States tried to go it alone, unwilling to cooperate with other countries and demonstrate global leadership,” We’ve finally begun to turn that all around.  Let’s not go back to the bad old days when the U.S. turned away from the rest of the world, and lost so much of its influence and respect.”

This is nothing short of casting the ideological die. On one side is the principle of standing for an America whose security is enhanced and values forwarded by being engaged as an active world leader. On the other side is an America that shirks from its vast and critical international responsibilities because most conservatives lack the gumption to have a tough discussion on revenues and spending.
Let’s talk about reforming aid and protecting America’s interests and values, not about taking our ball and going home.

Lessons From Tunisia

Posted on by The Progressive Policy Institute

With Tunisia calming down, it is worth reflecting on what the events might mean for us here in the good ol’ US of A.

The first point is that the Obama administration struck precisely the right balance between offering encouragement to the protesters and avoiding interfering in Tunisian internal matters. It is not quite true, as Andrew Sullivan implies, that Obama said nothing about the upheaval. The President released a statement saying he applauds Tunisians’ strength and dignity in standing up to corruption, an important comment that showed that America would not block the will of the Tunisian people. Nationalism is a powerful force in the modern world, and opposing it in now Tunisia would be a disastrous decision.

But neither is it true that the administration inserted itself into the equation, the way Abe Greenwald and others wanted it to. The Obama-ites kept their profile deliberately low, wary of making American support the issue that could be blamed for fomenting the revolution in a part of the world deeply suspicious of U.S. intervention. Unlike Greenwald et al., the administration understands that Tunisians hardly need the assent of an American president before bravely taking, or continuing, action. If anything, Tunisians would be wary of interference from a U.S. president that had praised the strong relations between the nations.

Second, the fact that America let an Arab dictator it supported fall will not go unnoticed. One of Al Qaeda’s major grievances with the U.S. is that America supports autocratic, corrupt, “un-Islamic” regimes like Saudi Arabia, Egypt, and Jordan. In the 1990s, senior Al Qaeda members, including Osama bin Laden, became (wrongly) convinced that it was U.S. power that was allowing these regimes to remain in power. As scholar Fawaz A. Gerges writes in his essential book The Far Enemy, bin Laden “considered Saudi Arabia an occupied country and its regime incapable of forcing the Americans out.” Gerges continues: “[H]e declared war on the United States, not on Saudi Arabia, because, as he told his cohorts, once the United States is expelled from the area, its local clients would fall like ripened fruits.” For Al Qaeda deputy Ayman al-Zawahiri the country in question was Egypt, but the logic was the same. The “near enemy” was propped up by “the far enemy,” America.

It will therefore be of great interest to Arabs and Muslims—and hardly just Al-Qaeda—that in fact America does not unconditionally support local despots. Should regime opponents emerge that are not inimical to American interests, the U.S. will not eternally stand in their way.

The real question is what lesson will be taken away from this. Will it be that America is in fact not behind the region’s many woes, that the U.S. is not the far enemy? Or rather, conversely, will it be that the U.S. will support tyrants until the Arab people rise up and cast them off? The two are not mutually exclusive, of course. One can imagine both becoming internalized by Middle Easterners in the coming days.

Chinese-U.S. Exchange Rates and Knowledge Capital Flows: Why We Feel Poorer

Posted on by The Progressive Policy Institute

The short summary:   The Chinese policy of buying dollars can be best understood as an indirect purchase of U.S. knowledge capital–technology and business know-how.  That, in a nutshell, is why we feel poorer today. Unless the Obama Administration understands the link between the undervalued yuan and the global  flows of knowledge capital,  negotiations with China are doomed to fail.

Viewed in the usual economic light, Chinese exchange rate policy in recent years looks like a gift to the U.S..   By buying up dollars to keep the yuan low, China–still a poor country– is effectively lending money to the U.S.–still a rich country–to buy Chinese products.  According to the official statistics, the U.S. has run a cumulative $1.4 trillion trade deficit with China since 2005. But over the same period, Chinese ownership of  dollar-denominated financial assets in the U.S. has risen by $1.3 trillion.

To put it another way, the conventional statistics seem to be saying that  the U.S. is getting $350+ billion a year in cheap clothing, electronics products, and toys at no real cost today.  What’s not to like?

But if this explanation was really correct–if  that purchase of dollars  was a gift from China–the U.S. would  be feeling happy and prosperous right now.  We have received all of these cheap goods and services, without having to give up very many of our own resources.

But of course, the U.S. doesn’t feel rich and happy right now–we feel poorer, while the Chinese are feeling more prosperous. How can we explain this?

The  reason why the Chinese purchase of dollars seems like a gift is  because we have a 20th century statistical system trying to track a 21st century  global economy. We can do a decent job tracking the flows of goods and services and a passable job tracking financial flows.  But there is no statistical agency tracking global knowledge capital flows–and that’s where the real story is. Take a look at this diagram.

The first three boxes represent the conventional view: The U.S. gets cheap goods and services, and then pays for them by selling financial  assets.

But that leaves out the  the transfer of knowledge capital  from the U.S. to China. In effect, the Chinese purchase of dollars is a mammoth subsidy for the transfer of technology and business-know into China.

Consider this. When China keeps the yuan low, that’s an inducement for U.S.-based companies to set up factories and research facilities in China, both for sale in China and for imports back to the U.S. .  And that, in turn, requires a transfer of  technology and business know-how from the U.S. to China.

My favorite example is furniture makers.  Over the years, U.S. furniture makers had accumulated this vast storehouse of knowledge–for example, how to make  coatings on dining room tables that are less likely to chip or discolor from heat or liquids. That’s one of the differences between a low-quality and a high-quality table.

As the manufacturing of furniture was offshored to China, the knowledge capital had to be transferred as well.   And that, in turn, helped turn the Chinese furniture industry into a global exporting powerhouse.

Now, let’s stop and make  three points here. First, we need to compliment China. It is not easy to absorb knowledge capital from the outside and make good use of it.  Frankly, all sorts of other countries could have tried the same exchange rate trick, and it wouldn’t have worked for them.

Second, the transfer of knowledge capital to China doesn’t mean that the same knowledge capital  disappears in the U.S. However, our knowledge capital  does become less valuable because there is more global competition–and that’s why we feel poorer. (see my earlier post on the writedown of knowledge capital)

Third, what’s needed from Washington is a sophisticated  response that both focuses on rebuilding our own knowledge capital, while at the same time slowing down the exchange-rate knowledge capital pump. More to come on this.

crossposted at Mandel on Innovation and Growth