Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

30 July 2008

How Republican Ideology Destroyed America’s Competitiveness and Sapped Her Strength


Introduction
Health Care
Pensions
Energy
Education
Our Military
Conclusion

Introduction

Four decades of ascendant Republican ideology are ending. Whether or not Barack Obama can give it the coup de grace, the ideology is spent. Even conservative pundit David Brooks seems to recognize its demise.

I’ve described the era now ending as our “Soviet period.” Of course the substance of our ideology differed from the Soviets’. Our Republicans abhorred Soviet Communism and everything it stood for, including the few good things like universal literacy, free education, and free health care.

But for the last forty years our reliance on simplistic ideology has been every bit as fervent, and every bit as misplaced, as the Soviets’ seven-decade flirtation with Marxism.

Our GOP used its own simplistic ideology as a foil to the Soviets’. It set up a Manichean dualism and used the ideological divide to feed our national pride, inspiring jingoism among us. In 1962, that jingoism nearly led to global nuclear annihilation. It was a classic case of demagoguery.

The irony is that the Republicans were partly right. Marx and Engels were just creative writers. They were not even notable thinkers, let alone economic scientists. In contrast, we were building on the work of great thinkers like Adam Smith and Thomas Jefferson.

The power of free markets is indeed remarkable. So is the power of freedom. But ideology is ideology. In order to work as a demagogic political tool, it has to be simple enough for Joe and Mary six-pack to understand. No subtlety or nuance can tarnish its false luster. It cannot admit anything as confusing as contradictions or checks and balances, or as abstruse as nonlinear effects.

So the Russians had their “Soviet Man”—a mythical creature who works selflessly for the glory of the state, without thought of personal reward, like the horse in George Orwell’s Animal Farm. We had our “noble entrepreneur”—a mythical creature who always works harder and smarter than any government bureaucrat, scientist or soldier. Through the magic of wishful thinking, this creature’s self-interest always operates for social good. Its self-seeking enhances social cohesion. Its greed is the marble from which we built our temple to Mammon, believing it would lead us to the promised land.

Unfortunately, things haven’t worked out that way. What we failed to notice was the quality of the leaders of this so-called “Reagan Revolution.” The “bookends” of our ideological “Soviet Period” were Ronald Reagan and Dubya. Reagan was a radio announcer and grade B actor. Dubya was and is a lightweight and goof-off who made it through college and business school with “gentlemen’s C’s” on his father’s position and money. To say these men were not great thinkers is Obamanian understatement.

Reagan at least had charm and affability—a first-class temperament. Dubya didn’t even have that. Neither could write or speak even as well as Engels or Marx, let alone in more than one language. To mention them in the same sentence with Adam Smith or Thomas Jefferson would be risible, if the consequences of their fairy tales weren’t so tragic.

Whoever wins this presidential election, we will be spending the next decade or two exploring those fairy tales and correcting their consequences. A McCain victory will only postpone the inevitable reckoning, which academia and think-tanks already have begun.

In this essay, I focus on those consequences. All are dramatic, clear, and already identified by others. What may not be so clear is how all are direct results of the Republican fairy tales that we have believed and taught our children for the last two generations.

Health Care

It is now common knowledge that every advanced industrial nation except ours has a form of universal, government-sponsored health care. The competitive consequence is also well known. American industry bears an unusual and extraordinary burden: the burden of financing health care for its workers. The result is a huge cost millstone around its neck. In the auto industry, the cost disadvantage amounts to nearly ten percent of the price of an entry-level car.

That cost disadvantage is a key factor in our loss of manufacturing jobs and our technological stagnation. When you have a cost disadvantage of nearly ten percent relative to your competitors, you don’t have a lot of money to spend on research and development. And so we lost the consumer electronics industry to the Japanese and are now in the process of losing our auto industry as well.

These facts are now well known and much discussed. What is less well known is their origin. They are direct consequences of Republican ideological fairy tales, as spun and retold by Reagan, Newt Gingrich and the Bushes. We don’t have universal, government-sponsored health care because it looked to them like “socialized medicine.” It contradicted their notion of the “noble entrepreneur”—in this case a doctor—working in a Rosseauian State of Nature, governed only by his presumably enlightened self-interest.

That fairy tale gave us the worst of both worlds, not just for would-be patients without access to doctors, but for doctors and actual patients as well. Our doctors and patients suffer under not just one bureaucracy—a government one—but many. Each private insurance company has its own bureaucracy. Each is reluctant to pay claims (because they cost money). Each has its own arcane rules, its own incompatible computer systems, and its own lengthy and tortuous internal processes for appealing denials of claims. Together, these noble entrepreneurs generate administrative costs between 15% and 30% (see sources 1 and 2), while Medicare, the “inefficient” government bureaucracy, keeps its administrative costs around 4%.

There is yet further irony. In most of the foreign health-care systems that Republican ideology likes to demonize, private medicine exists side-by-side with free, universal, government-sponsored health care. In Australia, Canada, England, and France (among others), you can still find private doctors and hospitals. If you are rich, or if you have a serious disease that can’t tolerate waiting in the queue—and if you are willing to pay for the earliest possible care—you can have it. But the government-sponsored systems give all citizens the peace of mind of knowing that they have basic preventative and curative care.

Equally important, those systems remove enormous costs and administrative burdens from the backs of foreign industries, which compete with ours. Our own industries have to run the same race with the health-care millstone around their necks, and with their employees and customers worried about losing everything to an injury or illness. Thus does Republican ideology hamstring our doctors, our workers and our industries.


Pensions

Once you understand the mess that Republican ideology has made of health care (and, in consequence, our industries’ competitiveness), you can better understand our retirement meltdown. The sorry state today of pensions in our country today is a direct result of Republicans’ eight-decade rear-guard action against Social Security.

Social Security is the strongest and longest-lived form of so-called “socialism” in the United States. But it’s not really socialism. It’s not financed by general tax revenues but by special taxes on workers and employers.

Through taxes on their wages, workers make about half of the payments. To that extent, Social Security is not socialism at all. Instead, it’s a self-financed retirement plan that the government mandates, manages and guarantees. Employers do pay the other half of expenses. But it’s not unreasonable for them to help keep the workers responsible for their success in the marketplace from becoming destitute (and a social burden) in their old age.

Despite the inaccuracy of the charge, Republicans have never thought of Social Security as anything other than socialism. Their dirty little secret is that they opposed it steadfastly since its inception. They fought its birth tooth and nail, calling FDR a “traitor to his class” for proposing it. They resisted it ever since, opposing taxes to support it, robbing its trust funds for other purposes, and decrying its meager allotments as a morally decadent “something for nothing.” (They always seem to ignore the half that comes directly out of workers’ pay.)

Dubya’s spectacularly unsuccessful attempt to privatize part of Social Security was just the latest of a long string of ideological assaults going all the way back to the New Deal. Only the extraordinary conditions of the Great Depression—and the specter of millions of destitute seniors begging or starving in the streets—created the political consensus to overcome Republicans’ bullheaded ideological opposition.

That opposition never waned. But something interesting happened in the interim between the New Deal and today. Many big employers supplemented Social Security with private pension plans of their own. They did so partly as a result of pressure from organized labor, and partly out of a sense of social responsibility arising from the shared sacrifice of the Great Depression and World War II.

The generous private pensions that most large corporations granted their workers were part of a social compact that sustained American industry (and workers!) from the postwar period until the eighties. With Social Security as a backstop and a supplement, this system worked very well for about a generation. Then it began to unravel.

The reasons why it unraveled were much the same as those for the failure of our health-care system. Supporting generous private pensions imposed an extraordinary cost on American industry. Competitors in advanced nations with better government-sponsored pension systems did not bear the same costs. Administrative expenses exploded as finance and investment became vastly more complex and the big corporations had to hire experts or privatize their pension management. Confusion and complexity increased as private administrative systems with incompatible rules, procedures and computer systems proliferated.

So now in pensions, as in health care, we have the worst of all possible worlds. We have a hybrid public-private system, with increasingly complex and confusing rules regarding what, if any, Social Security benefits are available to people who still work or have employer pensions or private pension funds. We have a balkanized system of public-private accounting, with various incompatible computer systems, that vastly increases administration expense. And, in the last decade, we also have the miracle of bankruptcy.

Big corporations weighed down by pension and health-care obligations recently discovered that these obligations are just promises. They have no more legal force than a promise to deliver goods or an unsecured promissory note. Like other contractual obligations, they can be shed or modified in bankruptcy. So our uncompetitive car companies and airlines—once the model of generosity to workers—began turning to the bankruptcy courts (or using the realistic threat of bankruptcy in collective bargaining) to shed the pension and health-care obligations that they solemnly undertook since World War II.

From the worker’s point of view, all this legal manipulation was a big shell game. Virtually without consequence or objection, industry broke solemn promises of health care and support in workers’ old age, often just as old age and infirm health arrived. The result, although perfectly legal, was a gigantic societal swindle, affecting millions of the very workers who helped build our nation’s postwar strength and prosperity. As I’ve argued in another post, this swindle evoked universal distrust and fear on the part of workers, undermining both their and their children’s motivation and our nation’s social cohesion.

I don’t mean to belittle the complexity of the pension problem. Pensions are a far more complex social issue than health care. Good health care is the means by which we keep our workforce healthy and productive. A strong national commitment to a healthy workforce is just common sense. But pensions involve paying for people’s living after their productive days are over, when they are surviving on past glory and, in a cynic’s view, may seem like parasites upon society. How much support society should provide them if they or their families have not made adequate provision for old age is an horrendously complex political, ethical, moral, social and economic question.

Every nation in the world is wrestling with that question in its own way, and there are no easy answers. But three things are clear. First, most people are simply not capable of saving, investing and managing their own investments for a comfortable old age. As the recent mortgage crisis and near financial meltdown amply demonstrated, our financial system is now so complex that even experts often get taken. To insist that ordinary people’s economic survival in old age depend on their own economic and financial expertise—or even their ability to select better options among profit-seeking, self-interested managers and advisers eager to take their money—is a recipe for disaster. We wisely avoided that pitfall in rejecting Dubya’s attempt to privatize a part of Social Security.

The second clear thing is that more investment variety is not necessarily better. Republican ideology has produced the greatest “flowering” of investment options in human history. In addition to the usual stocks and bonds, we have mutual funds, index funds, index futures, commodity futures, mortgage securities, “swaps,” derivatives and bond-default insurance. The more exotic investment vehicles (those toward the end of this list) are mostly for experts, but pension funds increasingly invest in most or all of them. As our population ages, the amount of pension money invested in these exotic and risky vehicles increases.

There is big money to be made in managing these investments. The lure of that big money is now distorting our workforce and our national priorities. The best and the brightest among our population are becoming investment bankers or the lawyers and economists who advise them. Meanwhile, foreign students come to us from all over the world to learn engineering, science, medicine, and manufacturing. Then, when they’ve learned all we have to teach, they increasingly return to their native lands, where there is more opportunity—and more money—in professions that create wealth rather than shuffling it around.

The final thing that is clear about the house of cards that Republican ideology built for pensions is its enormous administrative expense. You don’t have to be an economist or well versed in math to understand the inefficiency, duplication and waste caused by fragmentation—dare I say “atomization”?—of our financial industries, which are getting broader, more complex, less well regulated, and more numerous every day. Besides making room for snake-oil salesmen (whose defrauded victims we taxpayers have to support), financial atomization dramatically increases advertising, promotional, administrative and bureaucratic expense.

The end result is a system that works passably for the well-educated and diligent, who could fend for themselves in any society. But it’s one of the worst in the world for the rest. It allows millions of ordinary people to fall through the cracks. It is hideously inefficient and duplicative. It creates extraordinary opportunities for dishonesty, fraud and simple confusion. And because it offers such glowing financial rewards to the smart, cunning and sharp-elbowed, it drains the best of our brains into finance and investment. It threatens to convert the best of us from thinkers, discoverers, inventors, makers and doers into paper shufflers and money handlers.

Energy

Of all the disastrous effects of Republican ideology, its impact on energy policy has been the worst. We are the world’s only advanced industrial nation that has no national energy policy.

We don’t have one because we’ve bought the Republican fairly tale that free markets and self-interested entrepreneurs always know best. And so we’ve allowed the short-term self-interest of free marketers of oil, gas and the vehicles that waste them to build the world’s most costly and least flexible energy infrastructure.

Even our enemies and adversaries have coherent and effective national energy policies that fit their circumstances, resources and long-term national goals. Iran is developing nuclear energy so that it can sell its oil abroad, improve its citizens’ standard of living and propel its lagging economy into the twenty-first century. (Whether it also seeks nuclear weapons is an important question, but a separate one irrelevant to this discussion.) Russia is developing its vast reserves of oil and gas, keeping some for its own economic development, selling most to get money to repair the damage wrought by its own seventy-year Soviet period, and using its ownership as a political weapon to increase its influence abroad. Hugo Chavez of Venezuela is selling his nation’s vast reserves of oil to get the resources to raise Venezuelans out of poverty. He’s doing so awkwardly, with the economic sophistication you might expect from a man who emerged from the peasantry himself. But his basic strategy—selling natural resources to jump-start his economy and alleviate poverty—is sound and appropriate for Venezuela.

Every one of our allies and competitors also has an energy plan. France generates over three-quarters of its electrical energy from nuclear power. Germany has the world’s leading market share of solar panels and the world’s greatest installed capacity of modern windmills (although the U.S. recently overtook Germany in wind power actually generated) . Europe taxes gasoline to a price level more than twice ours, and Japan taxes gasoline to a price level about 180% of ours. By so doing they discourage excessive driving and gain revenue for roads and other social needs. Both Europe and Japan have cars that, on the average, are nearly twice as efficient as ours. (We recently raised our own legal standards, but the new standards go into effect gradually.) All these nations have long-range national plans that recognize the limits of and opportunities in their domestic energy resources.

Do we have anything like that kind of national energy policy? Do we have a plan that coheres with our circumstances and needs for the long term? Not at all.

In the absence of a plan, we have painted ourselves into an energy corner. We are buying over 10 million barrels of oil daily to support our oil addiction. Even at today’s reduced price of $125 per barrel, we spend $1.25 billion on foreign oil every day—more than twice as much as our average daily spending on the war in Iraq since its inception. But what’s worse is that we have no coherent short-term or medium-term plan, let alone a long-term plan, to kick our oil habit.

What don’t we have such a plan? Because for the last thirty years, since the Arab Oil Embargo, Republicans have told us fairy tales. Government, they said, was a wicked witch: untrustworthy, incompetent, downright evil, and prone to keeping you from enjoying your “own money.” If government or politicians tried to “pick winners,” they would lead us down the primrose path to ruin.

But government as wicked witch is only half the GOP’s fairy tale. The other half involves entrepreneurs, the “good fairies.” By waving their magic wands of self-interest and “consumer choice,” the fable goes, they will give us everything we want.

And so they did. They gave us inefficient, technologically backward vehicles that run on oil and nothing else. With all the persuasive power of modern advertising and public relations, they told us that these inefficient clunkers were what we wanted. They made us lust for bigger, heavier, clunkier, less efficient cars, for safety, power, and sheer self-indulgent excess. Our entrepreneurs never let on that what their billions in advertising made us want was not exactly what we need.

So here we are in 2008. We are wasting one-third of a trillion dollars every year on foreign oil. Our transportation economy is entirely dependent on oil. We are suffering from the highest energy cost burden since the Arab Oil Embargo of the early 1970s.

And what do our Republican fable spinners propose as a cure? More oil.

I’ll leave aside Senator McCain’s ridiculous proposal for a summer gas-tax holiday. That’s not much more ridiculous than Speaker Pelosi’s proposal to deplete the seventy-day supply of oil in our Strategic Petroleum Reserve for a few weeks of price relief.

The Republicans’ supposedly serious proposal is to start drilling for oil in our protected wilderness and coastal areas. But independent experts say it will take at least ten years before any of that oil comes to market. When it does, it will increase worldwide supply by ten percent. Yet in the meantime worldwide demand will have increased by 11.5 percent or more.

You don’t have to be an economist or mathematician to see how far out of bounds that Hail Mary pass will fall. It will never lower oil prices, let alone in the short term. The most it might do is reduce the rate of increase in oil prices from what it might otherwise have been, sometime ten years or more from now. More important, by providing the false hope of permanently lowering oil prices, it will dissuade us from what we have to do—transform our national economy to run on other sources of energy, principally nuclear, wind and solar power. Even disregarding its destructive effect on priceless wilderness, climate change, and living species, drilling for more oil is just digging ourselves deeper into the hole we are already in.

In contrast, Europe and Japan provide examples of what a rational energy policy might do. They pay the same global price that we do on the world market for oil. But their price for gas at the pump is roughly twice ours because they tax gas heavily. At the same time, their cars are roughly twice as efficient as ours and get roughly twice the mileage.

So Europeans and Japanese, on the average, pay about the same as we do per mile of car travel. But because their cars are twice as efficient, they use half as much gas per mile. The extra cost for gas, which equalizes their cost per mile, goes into taxes that support social programs like roads, health care, pensions, government-sponsored scientific research, and infrastructure. So, relative to us, Europeans and Japanese divert half of their consumers’ cost of foreign oil into social programs. Those programs make them richer as a society, while their equal price of travel per mile makes them no poorer as individuals.

Thus do Europeans and Japanese value their public sectors and support them with wise policy. And that’s not even mentioning their more advanced use of wind, solar, and nuclear power. Their primary difference from us is that they don’t believe the fairy tale that government is the wicked witch, taxes the ultimate evil, and private entrepreneurs the good fairies.

Education

The final field in which the Republicans’ ideological fairy tales have done us grievous harm is education. I make this point with diffidence because Dubya’s “No Child Left Behind” (NCLB) initiative has been a small step in the right direction. It puts the right focus on public education, requires accountability for results and insists that all our children have a chance to learn, regardless of race, ethnicity, family income or location.

Like the Iraq war, NCLB was half-hearted. It was underfunded, overly dependent upon edicts from Washington, and administered with a heavy hand. But had its heart in the right place.

The problem was that NCLB—one of the very few good things to emerge from Dubya’s abysmal two terms—marked a sharp divergence from Republican orthodoxy. For decades Republicans had insisted that education is a matter of States’ Rights and state funding and none of the federal government’s business. Ronald Reagan and Newt Gingrich went to far as to propose closing the federal Department of Education.

Republicans made these proposals despite our appalling neglect of large fractions of our children and increasing disparities in education from state to state. They taught us that federal money would do better in your hands than in teachers’. (Do you see a consistent theme of individual greed here?)

All these points were part of the Republicans’ master fairy tale—a perversion of free-market economics that Adam Smith would never recognize. According to that tale, the magic of markets transmutes the lead of individual greed and selfishness into the gold of social good. Jesus wants you to be rich. Being rich will make you good, and your being rich and good will make us all better. Or so the fairy tale went.

As in the cases of health care, pensions and energy, this fairy tale didn’t work so well in practice. It had two gigantic flaws. First, it neglected our history. Universal, free public education has been a key factor in our national success so far. We were the first nation to make a point of giving a free public education to every citizen, regardless of birth, social status or location. As a result, we now have what is generally recognized as the best system of public higher education in the world, by a considerable margin. Students come to our colleges and universities from all over the world to study engineering, science, medicine and business, among other things.

Second, the fairy tale neglected the competition we are facing as a nation. For two centuries, China has been in a national slump. While it once had its Mandarins and their national entrance examinations, it has never really had universal education, American style. Now it is emerging from its two-century slump and adopting the American vision of universal education. The results are likely to change the world.

We can already see the effects here at home. Chinese and Chinese-Americans already so dominate admissions to our premiere public university—the University of California at Berkeley—that non-Chinese, including Caucasians, have been demanding affirmative action. A friend of mine, a distinguished professor in the biological sciences at a prestigious public university, reports that over the last several years nearly all his graduate students and post-doctoral assistants have been ethnically Chinese. The others, he says, by and large are just not as diligent or as bright. Some of these new scientists are Chinese-Americans or recent immigrants, but many are Chinese expats eager to take their new learning back to China.

These are just anecdotes, but you can hear similar stories in every major university in the United States. If we don’t repair our public secondary education so that our own students can compete with Chinese (and other foreigners) in our best universities, then our grandchildren will all end up working for foreigners, if not as hired hands then as lawyers and investment bankers to their leading-edge businesses.

That’s why Dubya’s “No Child Left Behind” initiative, as awkward, clumsy and underfunded as it was, was indescribably important. It marked an abrupt change from the Republican fairy tale that government can do no right and private enterprise no wrong. It heralded a return to the successful American policy that free, high-quality public education is the most important infrastructure of all.

Over the coming decades, we must engage in friendly but serious competition with Europe and Asia to produce the best scientists, engineers, discoverers and inventors. The nation or region that wins that friendly competition will lead the human race and take us to the stars.

We once had a clear head start, but we have squandered it. Our system of higher education is still second to none, but our system of secondary education is barely average and losing ground. If we don’t fix it, we will end up a second rate power watching our standard of living and future prospects recede as other nations surpass us.

Nothing is more important. And nothing we do will improve our position until we give up the Republican fairy tale that government is impotent and incompetent and only private business works. Although private schools can and do provide isolated centers of excellence, entrepreneurs and private business can’t fix our broken system of public primary and secondary education. Only enlightened government policy can.

The next Newton, Einstein, Darwin, Pasteur or Salk could come from anywhere—even Appalachia, rural Georgia, or the economically and socially devastated communities of what was once New Orleans. Most children from those places don’t go to private schools. We need a strong system of universal public education to nurture their native talent.

Despite two decades of effort, we are consistently losing ground in repairing and enhancing that system. The false notions that government is the wicked witch and that we’d all be better off as a people if we all kept our “own money” and spent little on education don’t help. They especially don’t help when we waste money that we could use for education on foreign oil and gas-guzzling SUVs in the name of “free enterprise” and “consumer choice.”


Our Military

You would think that a party that spent decades demagoguing foreign threats would at least have left us with a strong military. But quite the opposite is true. Forty years of mostly Republican rule have hollowed out our military, leaving it far weaker than it need be. It is too small, too bureaucratic, too backward and unimaginative in doctrine and weapons, and far too dependent on the profit motive, rather than skill and patriotism, to supply our troops. At the same time, our military-industrial complex has evolved into the most bloated, bureaucratic, corrupt, and inefficient institution in our society. It makes our health-care system look rational. [For a small but telling recent example (10/12/08), read this story about two mid-level engineering managers who, for $ 1.6 million in illegal kickbacks, got Congress to fund $ 350 million worth of useless military projects through illegal lobbying.]

All this has happened on the Republicans’ watch. And it is no accident. Every part of this debacle flows directly from the GOP’s ideological fairy tale that government is the wicked witch and private, self-interested entrepreneurs the good fairies.

I could write a long essay about mismanagement alone. But I’ll limit myself to four points: the draft, our Manhattan Project, Blackwater, and the abysmal current state of our military supply chain.

From Paul Revere through World War II, we relied on citizen soldiers to meet foreign threats. With their aid, we beat the world’s most powerful empire to gain our independence. Much later, and with the help of allies and the draft, we beat the two most fearsome military societies ever known to humankind and saved the world from despotism. Our military of citizen soldiers worked.

All that changed after Vietnam. With poor advice and tragic machismo, our first Texan President, Lyndon Johnson, escalated an advisory role into all-out support of a crumbling and corrupt South Vietnamese regime that its own people perceived as oppressive and colonial. Our own people didn’t support that war, and our hearts weren’t in it. So we lost the first major conflict in our history.

Our Republican leaders took the wrong message from that loss because they asked the wrong question. They could have asked, “how can we assure popular support for war by limiting ourselves to conflicts whose necessity is self-evident?” Instead, they asked, “how can we give ourselves the ability to wage war without popular support?” The answer was “all-voluntary” armed forces.

So today we have replaced our superb military of citizen soldiers with paid mercenaries. The awful consequences of that decision are clear, and they are legion.

What once was a force motivated by solely by patriotism and self-sacrifice is now a force motivated in significant measure by money and benefits. Because our troops enlisted “voluntarily,” they have less leeway to complain of incompetence, corruption and mismanagement among their leaders. Because they often come from economic strata that have few other options, they and their parents do not have the education, income and social status to push for correction of obvious errors. Inexcusable failures to provide armor for Humvees or body armor for every combatant, for example, run on far too long.

One consequence is a military that is less well prepared. As times get tough—as they are now in Iraq—fewer people volunteer to bear a burden that the rest of the country is unwilling to bear. And so we have to dig deeper in the barrel, training troops with criminal records and sub-par test scores. At the same time, our troops and their loved ones have less leverage over leaders, politicians and military suppliers because they volunteered, because they are presumed to be paid enough to motivate their volunteering, and because they come (with a few exceptions that prove the rule) from the most needy strata of our society, including immigrants looking to earn their spurs.

The result is a vicious downward spiral into empire. Our leaders have more absolute power over a dwindling volunteer force of decreasing quality that has less wherewithal to object to its own misuse or abuse. Leaders’ freedom from popular rule tempts them to adventurism. They skimp on force protection and care both in combat and afterward. The general citizenry’s remove from the hard realities of combat make it ignorant of or oblivious to leaders’ adventurism, mismanagement, and abuse of our troops.

And so it goes. The only thing that cuts this vicious spiral is the high cost of protracted war. As the human and financial costs of war mount, fewer volunteer. Pay and benefits required to attract a volunteer force increase, and it gets harder and harder to raise or maintain an army. At the same time, force quality deteriorates, and we divert funds from supplies and material to paying troops increasing wages.

That is precisely where we are in Iraq right now. These factors are the only real impediment to our self-proclaimed Emperor making new war in Iran. The vicious downward spiral already has reached the stage where supporting a new ground war—especially against a far more formidable enemy—is practically impossible.

All this happened before, long ago. Toward the end of its long history, ancient Rome relied increasingly on paid mercenaries rather than citizen soldiers for its defense. Most scholars believe that change was the single most important reason for Rome’s decay. Today our volunteer forces, which rely on a high percentage of recent immigrants, even look like ancient Rome’s, in which vanquished foreign troops sought to earn Roman citizenship through military service. Mistakes never change, it seems, and democracies never learn until it’s too late.

Not only did Republican ideology transform our military, impairing its quality and vastly reducing its political influence and the public’s control over impulsive wars, mismanagement and corruption. It also transformed how and how well we supply our troops.

Today we have privatized virtually the entire military supply chain. Our focus is not speed, urgency and quality in delivering needed supplies and equipment to our fighting men and women. Our unconscionable delays in supplying armor for Humvees and enough body armor for all our troops proved that. Instead, our goals are competition in supply and bureaucratic fairness to profit-making private ventures.

To illustrate that dramatic change, compare our recent tanker-plane supply scandal with the Manhattan Project. For over three years, we have sought to replace our decades-old fleet of aerial refueling tankers with more modern versions. This is a pedestrian engineering project, involving little fundamentally new technology and only modest innovation in design. Yet three years have gone by without even letting a contract.

Why? Because the entire procurement process is oriented toward the private sector. The “revolving door” between Boeing and our military tempted Boeing’s executives to corruption in securing the contract. Partly as a result, the Air Force granted the contract to a competitor. Boeing successfully challenged the award as unfair, and the rebidding process is likely to take another year. When the dust settles, we will have taken the better part of four years just to grant a contract to supply a critical part of our Air Force’s ability to project force effectively around the globe.

Now compare the Manhattan Project. When it began, atomic weapons were just an abstract theory proposed by physicists, most of them foreign born. We had invented crude nuclear reactors, but no one knew for sure whether an atomic weapon was even possible. The very night before the first test, physicists were still calculating whether an atomic explosion might destroy all life on Earth by igniting the atmosphere in nuclear fire.

The Manhattan Project’s technical and engineering challenges were among the most formidable ever addressed. Not only was there abstruse theory of nuclear fission, then still in the process of development. We also had to solve many practical problems that no one had ever described, let alone solved. We had to separate uranium’s fissionable isotope and purify it. We tried two means: gaseous diffusion and centrifuges. The uranium hexafluoride used for gaseous diffusion was so corrosive that it destroyed high-quality stainless-steel piping in days. So we invented Teflon to avoid the corrosion. When centrifuges proved more capable, we built an entire city of them and supplied it with a substantial fraction of the entire nation’s electric power. Then when we had enough fissionable uranium, we had to develop the most precise explosive triggers ever made.

Although the Manhattan Project ran almost six years after Einstein’s famous letter to President Roosevelt, most of this development occurred after Pearl Harbor. It took less than four years. Other nations since have spent decades trying to duplicate these feats, although our successful methods (in general, not their details) are widely known.

The Manhattan Project was undoubtedly the most successful advanced military project in human history. How did we do it? The old-fashioned way. We put smart, dedicated people in charge. We recruited the best and the brightest scientists, engineers, technicians and machinists from the entire country. And we gave the project’s leaders virtually absolute authority to commandeer the nation’s material resources.

In short, we treated the Manhattan Project like what it was: a high-priority military project crucial to the nation’s survival. We didn’t worry about who made a profit or fret about fairness to private investors. We just worried about getting the job done.

In contrast, it will have taken us four years to write a contract for the new tanker planes, and lawyers and accountants will have played as big a part in the project as scientists and engineers. Welcome to the brave new world of for-profit military supply!

The sad story of privatization of our military supply chain didn’t end with the Humvee and body armor debacles or the tanker-plane scandal. Consider Blackwater. This force of private mercenaries was supposed to guard our State Department’s and other civilian personnel in Iraq. The idea was to relieve our over-stressed voluntary forces of non-essential duties. But we ended up paying Blackwater’s “troops” more than our military, while relieving them of responsibility for their actions. Out the window went the Geneva Conventions and the Uniform Code of Military Justice, insofar as these mercenaries were concerned. The result was a bunch of shot-up Iraqis, global embarrassment, and a bigger bill than our own military would have charged had it had the necessary troops.

I could go on. I could write about the hospitals and office buildings erected in Iraq by incompetent and corrupt American contractors, rather than the Army Corps of Engineers, which knows what it is doing and is accustomed to working under fire. I could describe how many of these structures were abandoned due to flaws as basic as leaking sewage. I could write about the small, innovative body-armor maker that never got the chance to supply our troops because of legal challenges by a competitor.

But you get the idea. It has been a little over thirty years since our last war, in Vietnam. During most of that time, Republicans ruled the roost. Their ideology that private profit in free markets is the source of all good prevailed. The result: our military supply chain is the most corrupt, backward, inefficient and irrational it has ever been.

If we had fought World War II this way, we would almost certainly have lost. We would still be working on the contract to develop the atom bomb.

Conclusion

Not every national failure can be traced to Republican ideology. The Cold War led to excess precisely because no real shots were fired. When it ended, we thought we saw the end of history. We naturally turned to commerce and luxury. We got soft, lazy, corrupt and stupid.

But now history has rebooted. We are facing some of our gravest challenges ever. We have to fight terrorists and win. We must completely transform our energy infrastructure. We have to reform our system of public primary and secondary education while maintaining our declining advantage in higher education. We have to restore funding for and leadership in the sciences, especially the biological sciences. We have to repair and improve our crumbling infrastructure, including the levees around New Orleans, our highways and bridges, and our outmoded and increasingly dangerous air traffic control system. And we have to do all these things at once.

If one general theme pervades this discussion of corrupting ideology, it is lopsidedness, imbalance and excess. The Russians had their “Soviet Man,” who would work tirelessly without hope of personal reward. We had our “entrepreneur,” whose self-interest and profit seeking would invariably advance our society.

Both are lopsided caricatures of human nature. Human motivation is a complex of many factors, some self-seeking and some altruistic. It does no good to oversimplify.

Self-interest is indeed a powerful force. Our Founders recognized that fact when they designed our society around free markets and carefully calibrated checks and balances to avoid excesses of governmental power.

Yet our Founders also exemplified nobler motives. If they had been as self-seeking as our modern financial entrepreneurs, they would not have spent so much time and energy trying to design a foolproof society that limited their own power. George Washington would not have refused a third term. Instead, they would simply have grabbed everything for themselves, just as did the noble “four hundred families” of Latin America.

Even in our age of corruption and decline, examples of altruistic behavior abound. Our troops in Iraq and Afghanistan enlisted and fight bravely not for the pay, but to protect their country. Doctors in our CDC and health services risk serious infection every day to track down illnesses, subdue antibiotic-resistant bugs, and prevent epidemics. They and lawyers in our Department of Justice earn far less than they could in the private sector; but both love their work because it makes the nation healthier and better. Writers and poets write not primarily for money, but because they are driven. Scientists seek the satisfaction and acclaim that comes from discovering Nature’s truth.

If we are to rescue our society from decline, we must learn anew to honor these non-pecuniary impulses. We must make use of the hard work and self-sacrifice that they motivate.

To do that, we must recognize that venture capital and small business are not the be-all and end-all of human organization. Where warranted, we must rely more on government and large organizations to implement national policy choices. And we must make those policy choices with the knowledge that greed and short-term self-interest will not solve all our problems. In sum, we must remove the blinders of Republican ideology and see human life in all its complexity and grandeur.

Most of all, we must learn again to acknowledge and respect government’s many remarkable achievements. The Manhattan Project was a government-run military project that leaped extraordinary technological hurdles in the midst of war. Our Post Office is one of the best in the world. It introduced non-lick stamps and overnight mail years ago. Try to find those innovations in foreign post office! And have you compared the service of your local Post Office with that of your (private) cell-phone company or Internet service provider lately?

Our Social Security Administration supports tens of millions of pensioners with checks and electronic deposits that arrive on time, without fail, every month. The whole world relies on our Centers for Disease Control and Prevention to discover and thwart the next bacterial or viral plague. Its website is a uniquely valuable compendium of accurate, balanced and leading-edge medical, epidemiological and other scientific information, on every health-related topic from A to Z, offered free of charge to the entire world.

And our military, despite its problems and mismanagement, is still the best in the world. When Dubya’s incompetence and cronyism emasculated our Federal Emergency Management Agency, what swooped in to pick up the pieces after Katrina? Certainly not our private sector, which provided defective surplus trailers full of dangerous formaldehyde. In the immediate aftermath of the disaster, it was our Navy and Coast Guard that provided an effective emergency response, just as our military had done after the Indonesian tsunami and later did after the devastating earthquake in Pakistan.

All of these institutions were and are governmental, staffed largely by people whose principal motivation is something other than personal financial gain. And there are many more. Government is not the wicked witch or incompetent bumbler that Republican propaganda has portrayed for two generations.

It’s not enough just to discard misleading Republican ideology. We should reject all ideology as useless oversimplification, just as we rejected Communism. We should return to the realism, pragmatism and nuanced intelligence that were the source of our Founders’ genius and are our national birthright.

If we can do that, we can arrest our national decline. If not, then your grandchildren will live to see the day when foreigners from more successful societies will come to gawk and buy.

The foreigners will marvel at our quaint religion and ideology. They will gawk at our backwardness. After shaking their heads, they will use their stronger currencies to buy our goods, our land, our companies, and our human talent. And our Republican ideologues—if any still remain—will tell your grandchildren that all this is a consequence of free markets and therefore good for them.

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Footnote: The danger of “financializing” our economy, with consequent neglect of industrial innovation, manufacturing and real wealth creation, is neither my idea nor idle speculation. In the third part of an excellent book celebrated for other reasons, Kevin Phillips documents the phenomenon meticulously. He concludes that the United States is now in about the same place in this process where the British, Dutch and Spanish empires were when they began their respective social, economic and military declines. See Kevin Phillips, American Theocracy 265-318 (Viking, 2006).




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7 Comments:

  • At Tue May 26, 07:07:00 PM EDT, Anonymous Anonymous said…

    I had to postpone reading the rest of this after the 'Energy' section. I guess individual rights, property rights and contract rights are just wastes of time. Society as a collectivist whole is more important right? No. Wrong. Do such social engineers as this writer even have a real concept of ethics or only one that is one sided toward 'the common good'?

     
  • At Wed May 27, 07:52:00 PM EDT, Blogger jay said…

    Dear Anonymous,

    Have you seen anything on this blog that abjures individual rights, property rights or contract rights? If you think you have, tell me where, and I’ll show you how you misread or misinterpreted my words. (See, for example, this post on corporations, which might surprise you.)

    What you (and many so-called “conservatives”) fail to realize is that all these rights are products of social life, i.e., of the community. Even if you’re a big guy with lots of muscle, your rights are nothing without a community to respect and enforce them. So the rights you cite are not starting points, but the product of a properly functioning community.

    As for ethics, modern science teaches us that it, too, is a product of our evolution as social animals. Less social creatures have very different ethics. Spiders and many reptiles eat their young (if given the chance). Black widow spiders eat their males after copulation. If these creatures had brains the size of ours, their ethics would be very different.

    Our ethics derive primarily from our social life. That is our chief evolutionary advantage, even more important than our brains and opposable thumbs. It takes tens of thousands of people working in harmony to design, build and fuel aircraft and organize, schedule and operate air transportation. Creatures that have no social life could not possibly duplicate feats like artificial air travel.

    Individual rights are an important part of our evolutionary heritage. But they are only part. The tragedy of the last thirty years is that many Americans don’t recognize this fact. They have elevated individual rights far above their social value and the needs of the community. As a result, we are losing ground relative to other societies in almost every objective measure of economic and social progress, including energy, health care, good cars, and personal wealth.

    The caricature that masquerades as “conservatism” today lacks pragmatism, balance and perspective. That’s not surprising, as it’s not “conservatism” in any commonly understood sense of that word. The Founders of our nation, who were realists and pragmatists above all (except in the South about slavery), would never recognize the simplistic fairy tales many Republicans spout today. They would see them as irrational gibberish, not worth discussing, let alone following.

    Jay

     
  • At Wed Jan 02, 08:30:00 AM EST, Blogger George Carty said…

    I was reading your section on military affairs, and I think that the desire to be able to wage war without popular support was not purely generated by Vietnam.

    The proto-neocons (many of whom were of course Jewish) were deeply haunted by the memory of 1938, when (in their view at least) the Nazi menace could have been strangled in its cradle had the British and French governments not been hobbled by a pro-appeasement public.

    It wasn't until 1939 that the British and French peoples were willing to fight Germany, because the occupation of Prague demonstrated beyond the shadow of a doubt that Hitler's ambitions went beyond German-majority lands, and the Molotov-Ribbentrop pact placed anti-Communists and anti-Nazis on the same side. By then though, waging war on Germany was far more difficult, because the Molotov-Ribbentrop pact meant Germany was able to get vital raw materials (such as grain and oil) from the Soviet Union, thus nullifying the naval blockade that was the most powerful weapon then available to Britain and France.

    As for Boeing, perhaps they are paid over the odds for military products as a kind of covert subsidy, to allow them to compete with Airbus (which is more openly subsidized by European governments). Perhaps, the huge fixed costs associated with aircraft manufacturing mean that in a true free-market economy, air travel would still be only for a privileged elite as it was prior to World War II.

     
  • At Fri Jan 04, 05:02:00 PM EST, Blogger Jay Dratler, Jr., Ph.D., J.D. said…

    Dear George,

    Welcome back!

    Your first point seems plausible on a quick read. But that’s not how things actually happened. You overestimate both the influence of Jews on American military policy and the ease of, as you put it, strangling Nazism in its cradle.

    You are right that Jewish neocons had an inordinate influence on Dubya's catastrophic military policy. That level of influence, however, was an anomaly, never before seen and probably never to be repeated.

    Historically and today, the top ranks of US military strategists are almost devoid of Jews. Hyman Rickover, the father of the nuclear submarine, was a rare exception. His fame came in part from that fact.

    The idea of an all-volunteer army seems to have come out of the military itself, in response to political pressure. It was well into implementation by the time Dubya took office with his neocons.

    An all-volunteer force was an obvious (but highly risky) response to the debacle of Vietnam. Protests, largely by people threatened with the draft, had brought a military misadventure to an end despite the right wing’s adamant support for it.

    There are still people in this country who think we could have ”won” in Vietnam if we had just put more bodies and more billions into it. Some of them even think we should have nuked the North.

    That much I known from having lived through the entire period. Jewish angst about Nazism or the Holocaust had absolutely nothing to do with it. No one confused Vietnam with Nazi Germany. Nor did anyone confuse a small Asian nation fighting for its independence with the most dangerous military tyranny the world had ever known.

    Jewish influence and memories of Nazism and the Holocaust do play a role in our Middle East policy. (See 1 and 2) for the evolution of my views on this point.) But the all-volunteer army arose out of the perceived menace of global Communism and early fears of China’s rise. The original erroneous theory was McNamara’s domino theory, for which he apologized before he died. McNamara was not a Jew, nor was McGeorge Bundy.

    As for strangling the Nazism in its crib, that was a pipe dream of Monday-morning quarterbacks. The European allies made two disastrous mistakes early on. First, against the advice of our then president (Woodrow Wilson), they visited collective punishment on Germany for World War I, causing the most agonizing inflation in human history. Second, they later failed to see that Germany was turning its considerable engineering and commercial talent toward re-arming, starting soon after Hitler became chancellor in 1933. By 1938 it was far too late to strangle the German blitzkrieg machine in its crib, although an earlier and more united allied start might have shortened the war.

    Reply continues below.

     
  • At Fri Jan 04, 05:11:00 PM EST, Blogger Jay Dratler, Jr., Ph.D., J.D. said…

    Dear George,

    (Reply above continues . . .)

    You may be right that some US military contract awards may constitute hidden subsidies in part. But subsidies are a minor factor. Far more important is the view held by many senior military officers (and a big faction of Congress) that any foreign source of military supply is intrinsically less secure and less reliable than an American counterpart.

    Your analysis also ignores one thing. It was Boeing's own corruption and unfair influence that led to the award to the rival in the first place, and therefore to the insanely long contracting period.

    Like the greed, laziness and lack of integrity from which it arises, corruption doesn’t have to make sense. It just is. The tanker plane wasn’t even that big a project to begin with, and its technology wasn’t (and isn’t) especially advanced. Boeing apparently put its B or C team on the job, with correspondingly abysmal results.

    A lot of serious mistakes come from people re-fighting the last century’s wars and re-fighting them badly. In my view, the most important lessons of the twentieth century’s first half are not the dangers of appeasement. They are (1 and 2) that: (1) punishing a whole people collectively for the sins of their leaders and (2) stomping on a loser are bad policy. If Woodrow Wilson had prevailed at Versailles, there never would have been a Second World War or Germany’s psychotic break of Nazism, and our species might be half a century ahead. (Just look at Germany today to get an idea how far ahead.)

    Best,

    Jay

     
  • At Sun Jan 06, 08:49:00 AM EST, Blogger George Carty said…

    Dear Jay,

    Thanks for the correction on the motivation for the switch to an all-volunteer military. I should have had more sense, given that even the earliest precursors to the neocons (the Scoop Jackson Democrats) didn't really come into being until the Vietnam War was almost over.

    What are your own opinions on Vietnam? My impression of the hawks is that they claim that the US should have invaded North Vietnam, but that historically the generals refused to do this for fear of bringing China into the war (just as it had done in Korea).

    I'm not arguing that Nazism could have been easily defeated in 1938, just arguing that that's the way the neocons see it. However, the fact that Hitler himself backed down in 1938 (his favoured outcome was not the Munich Agreement, but a private war against the Czechs) suggests otherwise.

    If you're wanting to look further back in time as to what caused the rise of the Nazis, you much also remember that the reason Britain and France hit Germany with such swingeing reparations bills was because they needed the money to pay their own war debts to the United States.

    Another factor in the rise of Nazism was the highly uneven nature of German development, which combined world-beating industrial corporations with a decrepit and highly overmanned farming sector. Peasant farmers -- most of which had less than 5 hectares of land -- were the socioeconomic group in Germany most ardently supportive of the Nazis, because they hoped to gain new lands in the East. The Nazi belief that Germany needed more Lebensraum was no doubt backed up by the observation that millions of Europeans had sought Lebensraum on an individual basis (by emigrating to the United States).

    George Carty

     
  • At Thu Jan 10, 07:46:00 AM EST, Blogger Jay Dratler, Jr., Ph.D., J.D. said…

    Dear George,

    Thanks for your acknowledgement. Recognizing error is always the beginning of wisdom, especially if it’s your own. I try to do that on this blog, as in this example (see comments also).

    I’ve written on Vietnam at least three times previously. (See 1 (introduction), 2, and 3.) Our involvement in that war was a disastrous blunder: a combination of fuzzy thinking, national paranoia, and hubris bordering on insanity. It’s not hard to make the case that that single monstrous error led to many others, including (indirectly) our two most recent unnecessary wars.

    As for the lead-up to World War II, I take your point about Britain’s and the European Allies’ financial motive for squeezing Germany. But the metaphor “blood from a turnip” comes to mind.

    Although I’m certainly no expert on the subject, I’m not sure you’ve got it right about German farming. When I visited Warnemunde (in the former East Germany) a few years ago, I was struck by the huge size of German family farms---much larger than their American counterparts (excluding agribusiness, of course).

    The guide on our bicycle trip explained that the large farm size was due to primogeniture: the German practice of giving all the land to the firstborn son, leaving other siblings to fend for themselves. She further explained that this practice had, in the nineteenth century, forced a mass emigration of unlucky siblings from that part of Germany to the US, in particular to Pennsylvania.

    On returning to the US, I had a chance to verify her explanation. Lack of land for dispossessed siblings forced German immigration not only into Pennsylvania, but also into Missouri, where the 1848 anti-Hapsburg revolution was another cause of immigration.

    These observations don’t refute your basic conclusion that land may have been a contributing cause of both world wars. But the reason may have been more complex than the small size of German family farms.

    History is a complex subject, so it’s easy to draw conclusions that don’t hold up to close analysis. But two general conclusions appear reliable. First, very few pure military adventures ever succeed. Most just produce suffering and retrogression for everyone involved, including the power(s) that started them. Second, a little humility and realism on the part of political and military leaders about effectiveness of changing destinies and cultures by force goes a long, long way.

    It gives me hope that two of our President’s most recent appointments—John Kerry at State and Chuck Hagel at Defense—understand these truths in their bones. Both men suffered and bled in real combat (in Vietnam) to learn those lessons. (The lack of that sort of experience in our recent civilian Pentagon leaders, especially That Idiot Rumsfeld, was telling.) Maybe our young, cocky nation is finally growing up.

    One last bit of speculation seems important. With Europe (including Russia) and Asia (including China) having learned these lessons the hard way over centuries of ceaseless war, the United States has recently played the role of rogue among the major powers. That’s why President Obama’s re-election may mark a turning point in world history, away from war and toward survival and prosperity for our species. That’s also why many Americans cringe when we see Britain trying to go it alone, rather than lending its weight and considerable brainpower to the project of a united and peaceful Europe.

    Best,

    Jay

     

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