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Questioning the Case for War

June 15, 2018 in Economics

By Christopher A. Preble

Christopher A. Preble

While much of the world is focused on the war avoided
(temporarily at least) on the Korean Peninsula, I’ve been
thinking about the one in Iraq that we failed to stop fifteen years
ago—and the one that some still want to fight in neighboring
Iran. The occasion for this reflection is the upcoming release of
Rob Reiner’s “Shock and Awe,” a film about Knight
Ridder’s Washington Bureau, one of the very few American news
organizations that got the Iraq story right.

Knight Ridder’s
Washington Bureau was one of the very few American news
organizations that got the Iraq story right.

McClatchy, which acquired Knight Ridder in 2006, hosted an
advanced screening this week at the Newseum. A discussion with
Reiner and the four real-life characters who are the film’s
main characters followed: DC Bureau Chief John Walcott, and
reporters Jonathan Landay, Warren Strobel, and Joe Galloway.
(McClatchy has compiled several of the stories featured in the film
here).

I’ll have more to say about the movie closer to its official
release (scheduled for July 13; it will be available on DirecTV starting on June 14), but two things
from the movie and ensuing discussion particularly resonated with
me: one, the deliberate and often deceptive way that hawks divulge
information to build the case for war; and, two, the pressure that
is exerted upon those willing to question it.

One of the touchstones of Knight Ridder’s journalism was
the inclination of its reporters to challenge conventional wisdom
and to seek out alternative explanations. In the post-screening
discussion, Walcott explained that too many reporters rely on the
statements of senior government officials, serving more like
stenographers than thoughtful individuals attempting to uncover the
truth. News organizations tend to assess the quality of information
based on the seniority of the persons doling it out. In fact, the
inverse may be closer to true: mid-level personnel with comparable
access, but who are less invested in a particular course of action,
are likely to divulge information that strays from the official
narrative.

Such skepticism is particularly important in the run-up to war.
The typical technique for discrediting the opposition often hinges
on the claim that outsiders, lacking access to classified
information, don’t have sufficient grounds to question the
war advocates’ claims. Instead, we are all expected to defer
to the judgement of a select few who purportedly have all the
relevant facts.

But the hawks often determine what is “relevant.” In
his reporting at the time, Landay noted that many within the U.S.
intelligence community were highly skeptical of Bush administration
officials’ claims. Whereas Secretary of Defense Donald
Rumsfeld was dismissing …read more

Source: OP-EDS

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The DACA 'Compromise' Bill Is the Worst Immigration Legislation in a Century

June 15, 2018 in Economics

By Alex Nowrasteh

Alex Nowrasteh

Ever since President Trump set in motion the gradual termination
of the Deferred Action for Childhood Arrivals program, which gave
work permits to young immigrants brought here illegally when they
were children, Congress has been stalled on solving the situation
of these 700,000 so-called Dreamers.

After much Republican intraparty wrangling, Speaker Paul D. Ryan
just agreed to bring two bills to the floor of the House of
Representatives.

He released one of those bills Thursday. The other has been
kicking around Washington for a while: the Securing America’s
Future Act. The White House supported an earlier version of it,
stating that it “would accomplish the President’s core
priorities
for the American people.” The problem is that
even if the SAF Act doesn’t pass, its draconian cuts to
immigration will be the Republican starting point for all future
negotiations.

It’s misleading to even
call the SAF Act an immigration bill. As a matter of rhetoric, it
an anti-immigration piece of legislation.

The primary outrage is this: SAF won’t give Dreamers green
cards. Instead it grants renewable residency permits — with
no pathway to citizenship — to some DACA recipients.
Worse, the restrictions are so onerous that few Dreamers could ever
spend a year as a stay-at-home mother, risk starting a small
business or even become a priest. That’s because this bill
would make it a crime for anyone holding a SAF permit to have an
income below 125% of poverty level.

The House sponsors of the SAF Act claim it will cut only about a
quarter of all green cards, but they are significantly understating
its effect.

SAF cuts the number of legal immigrants by about 40% initially,
and that number could reach 50% over 10 years. It cancels the
diversity green card lottery, eliminates all family-sponsored
immigration categories except for the most immediate relatives of
U.S. citizens, and cuts to the bone the number of asylum seekers
who will be admitted.

The SAF Act also purports to increase the number of highly
skilled immigrants allowed into the U.S., and allocates 55,000 additional green cards toward
that. But of adults who immigrated on a family or diversity visa in
2015, 47% had a college degree. The impact of any cuts to those
programs will far outweigh the added employment visas.

This bill also poses major trouble for the families of legal
immigrants. Under SAF, legal immigrants who already have a green
card would be mostly unable to bring their foreign-born spouses or
children to the U.S. Additionally, immigrants who have waited for
decades for a type of green card that would be eliminated by the
SAF bill would …read more

Source: OP-EDS

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Trump May Well Have a Point over Trade but It Doesn't Mean He's Right

June 15, 2018 in Economics

By Ryan Bourne

Ryan Bourne

‘Well, he’s got a point.” One hears that
phrase a lot about President Trump. It explains his appeal.
Highlighting self-evident truths others gloss over — that
some illegal immigrants commit gruesome crimes, for example —
he gives voice to fears usually left unsaid. Those who reactively
deny it look stupid. Those who describe it in broader context?
Well, “if you’re explaining, you’re
losing”, as President Reagan once said.

Before and after the G7 summit,the President
faced righteous criticism from international leaders for deciding
not to renew exemptions for the EU, Canada and Mexico from his
steel and aluminium tariffs. He responded by pointing out how
heavily protected Canadian dairy and EU car markets are.

“We have put up with Trade Abuse for many decades —
and that is long enough,” he tweeted. His tariffs, and
consideration of extending them to cars were, he claimed, really a
response to this protectionism. Ideally, all countries would eliminate tariff and non-tariff
barriers,
he mused. But in the absence of that, he just wants
reciprocity and a level playing field.

Who can argue with that? It all sounds reasonable. And,
importantly, he does have a point! Canada’s dairy market is
heavily insulated, with a “supply management” system
incorporating tariff rates of near 300pc on dairy imports beyond
their quota of 10pc market share. The European Union does impose
10pc tariffs on imports of American cars while the US charges only 2.5pc the other way
(though truck tariffs are higher in the US than EU).

Trump, therefore, gives voice to the US car and dairy industries
who want more freedom to export. These facts also allow him to take
the moral high ground, creating space for Republican free-traders
to justify new US trade barriers as a short-term price to pay for a
freer future global trading environment.

But should we really believe that is what Trump desires?
There’s not much evidence to suggest so. Remember, his steel
and aluminium tariffs have been legally justified on “national
security” grounds,
not tit-for-tat protection. Why Canada
and the EU opening up their dairy and car markets would resolve
national security concerns about importing steel and aluminum
inputs from allies is anybody’s guess.

If Trump were actually concerned with reciprocity, he
wouldn’t cherry-pick individual sectors, but look at the
bigger picture. This shows international tariffs have been falling
worldwide over the past three decades as a result of painstaking
multilateral negotiations and free trade deals.

According to World Bank data, the overall weighted mean applied
tariff rate for the US and EU are near identical at 1.6pc, and even
lower in Canada at 0.8pc. Mexico …read more

Source: OP-EDS

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A Naval Race with China Is Unnecessary and Will Likely Backfire

June 14, 2018 in Economics

By John Glaser

John Glaser

WASHINGTON – Policymakers increasingly perceive China’s growing
naval strength in Asia as an acute threat to American interests
that must be met with a corresponding surge in U.S. naval power in
the Pacific.

However, precisely what tangible threat a few more Chinese
frigates on the other side of the planet poses to U.S. national
security interests is rather difficult to identify. And exactly
what objective is supposed to be achieved by boosting the U.S.
Navy’s presence in the region is something of a mystery.

Hawks point to Chinese territorial claims and naval activity in
the South China Sea as a signal of Beijing’s growing ability to
undermine freedom of navigation. But capability does not equal
intent. Indeed, any interruption in commercial shipping in the
Pacific would be devastating for China’s own economic and security
interests.

China’s naval expansion
threatens not so much America’s security, but its
prestige.

China is the largest trading nation in the world and relies on
the South China Sea for almost 40 percent of all its trade, valued
at roughly $1.5 trillion per year. If anything, Beijing’s more
assertive posture suggests a determination not to close off vital
sea lanes, but to keep them open.

It is notable, in addition, that the United States perceives a
grave threat from China’s naval expansion that China’s own
neighbors seem to miss.

Average defense spending as a percentage of GDP among the 11
East Asian states along China’s periphery has declined by almost
half over the past 30 years. Moreover, none of them have engaged in
their own freedom of navigation operations to directly challenge
China, despite encouragement to do so from Washington.

The Philippines had a major dispute with China over maritime and
territorial claims, which led to multiple naval standoffs, but now
Manila appears to be buddying up to Beijing, not balancing against
it. If China’s own proximate rivals don’t see a major threat, why
should we?

Even stipulating that Chinese naval power is a problem, one is
still left to wonder what effect beefing up the U.S. Pacific Fleet
is expected to have on Beijing’s calculations.

Are we to believe Beijing will respond to a proliferation of
U.S. warships off its shore by slashing its naval budget,
decommissioning scores of ships, and eagerly forfeiting its
regional ambitions?

There is a glaring logical contradiction in depicting China as a
nascent peer competitor doggedly seeking to supplant America as the
global juggernaut by whatever means necessary, but which will
abruptly cower in response to a mild U.S. naval buildup in the
Pacific Ocean.

More likely, cranking up a Sino-American naval competition will
generate heightened fear and suspicion in Beijing.

Combined with President Trump’s …read more

Source: OP-EDS

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AT&T Ruling Tells Government: It's Not 1948 Anymore

June 13, 2018 in Economics

By Walter Olson

Walter Olson

Judge to federal government: The entertainment business has
moved on from the Truman era, and so has antitrust law.

In 1948 the US Supreme Court ordered Hollywood studios to sell their movie
theaters, following the then-popular idea that the government
should police marketplace competition by restraining businesses’
vertical integration — or as we might put it these days, by
ordering content kept separate from distribution.

The surprise in 2018 is not so much that US District Judge
Richard Leon
rejected
the government’s challenge to the $85 billion
AT&T-Time Warner merger. That much was expected by most
antitrust watchers. The shock came from the stinging way he
rejected the government’s evidence — using language such as
“gossamer thin” and “poppycock.”

[pullquote[The entertainment business has moved on from the Truman
era, and so has antitrust law.[/pullquote]

That surprise wasn’t an unpleasant one for many. Media and
telecom stocks rose on Wall Street, with the decision
widely seen as green lighting further hookups of cable and wireless
distributors with content providers, such asa potential Comcast deal for 21st Century
Fox.

While “horizontal” challenges to mergers between competitors who
sell to the same group of customers are alive and well, the
government hadn’t gone all the way to a court decision in a
vertical merger case in 40 years (and it lost then, too). It’s been more than 30 years since the government
successfully opposed a vertical merger, though it’s sometimes
negotiated to attach strings in order to proceed.

Until recently, media companies could do well at either the
content end — like Time Warner, with its properties such as
CNN, Turner and HBO — or at the distribution end, like
AT&T with its vast consumer base including cell phone and
satellite users. You could be good at making shows even if you
weren’t good at getting to know individual customers and their
data.

Now, amid rapid technological change, the advantage has shifted
to companies that can do both, commissioning original programming
while also knowing a lot in real time about who is watching and
how, making informed predictions about what they might want to
watch tomorrow or next year. Netflix, Hulu and Amazon, for example
— with Facebook, Google and others coming up fast — can
do both. Enterprises of this sort, the judge wrote, “have driven much of the recent
innovation in the video programming and distribution industry.”

The government’s own merger guidelines describe vertical mergers as “not invariably
innocuous,” a backhanded phrasing that points to the uphill legal
burden of showing that the case …read more

Source: OP-EDS

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Afghan Ceasefire an Opportunity to Improve U.S.–Pakistan Relations

June 13, 2018 in Economics

By Sahar Khan

Sahar Khan

On June 7, Afghan President Ashraf Ghani announced a unilateral ceasefire with the Taliban from
June 12 to 20, which the U.S. said it would honor. The Taliban followed suit,
announcing a 3-day ceasefire coinciding with the Afghan
government’s.

Why it matters: The ceasefire’s outcome will
almost certainly impact the Afghan-led and Afghan-owned peace
process: As the Taliban’s first ceasefire since the Afghanistan War’s
inception in 2001, it indicates a strategic shift for how the group
might engage in talks with the Afghan government. But the ceasefire
also presents an opportunity for the U.S. and Pakistan to improve
their bilateral relationship, which has hit a nadir.

Since 2001, U.S. administrations have repeatedly asked Pakistan
to use its leverage against the Taliban to get them to the
negotiating table, even as its influence over the Taliban has waned
over the past decade. This time around, Pakistan, along with UNSC members, helped persuade the Taliban to reciprocate
Ghani’s temporary truce. That’s a positive sign for Pakistan, which
has always sought a prominent role in U.S.-Afghan
peace talks.

While the Trump administration refuses to hold direct
negotiations with the Taliban, U.S. officials are still asking
Pakistan to facilitate Afghan-Taliban peace talks, as part
of the administration’s support for an Afghan-led and Afghan-owned
peace process. Pakistan may not be the most reliable partner for
U.S. efforts in Afghanistan, but it is a key regional player.

The bottom line: If the U.S. hopes to end its
war in Afghanistan with a lasting political settlement, it needs to
improve its relationship with Pakistan — and hold direct
talks with the Taliban, which is part of Afghanistan’s political
fabric.

Sahar Khan is a
visiting research fellow in the Cato Institute’s Defense and
Foreign Policy Department. …read more

Source: OP-EDS

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A New Framework for Assessing the Risks from U.S. Arms Sales

June 13, 2018 in Economics

By A. Trevor Thrall, Caroline Dorminey

A. Trevor Thrall and Caroline Dorminey

In the past two years, Congress has tried (and failed) twice to halt American arms
sales to Saudi Arabia in response to that country’s
intervention in Yemen’s civil war. This level of concern is
historically unusual. Arms sales rarely spur much debate in
Washington, where they are viewed as a critical tool of American
foreign policy. The traditional refrain holds that arms sales
promise leverage over recipient countries, help the United States
support allies and manage regional balances of power, and generate
economic benefits to boot. With some exceptions, few have challenged the wisdom of
American arms sales practices.

In a recent study for the Cato Institute, however, we argue
that the government’s approach to arms sales is misguided.
The United States accepts as given the potential benefits of
selling weapons while underestimating or simply ignoring the
potential risks. The result has been too many arms sales to too
many countries where the risks are likely to outweigh the benefits.
Between 2002 and 2016, America delivered $197 billion worth of major
conventional weapons, equipment, and training through its Foreign
Military Sales program to 167 states worldwide. It is difficult to
imagine what sort of process would rate so many of the
world’s roughly 200 countries as safe bets to receive
American weapons. Indeed, using a “risk index” we
created to assess U.S. arms sales, we found that in this time
period, the average dollar value of U.S. arms sales per nation to
the riskiest states was higher than to the least risky states. Even
more disturbing was our finding that 32 of the 167 recipients had
risk index scores higherthan the average score of the 16
nations currently banned from purchasing American weapons.

For the United States to make more responsible use of arms
sales, the approval process needs to change. And though our initial
study focused on arms sales, the logic is the same for arms
transfers (where the United States provides weapons to states or
groups at no cost). There are often compelling reasons to consider
providing weapons even (and sometimes especially) to risky clients,
but the United States should account more carefully for both the
benefits and the costs. The easiest place to start is cases of
sales and transfers to nations engaged in conflict, fragile states,
or states with poor human rights records, as well as in cases that
do not directly enhance American national security. In these cases,
the approval process should be more transparent, the bar for
approval should be higher, and the government should do more to
monitor weapons …read more

Source: OP-EDS

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If Anyone Gets the Nobel, It’s Moon and Kim

June 13, 2018 in Economics

By Doug Bandow

Doug Bandow

Donald Trump, Nobel laureate? It is a jarring vision, but one
that inched a little closer to reality after the seemingly amiable
meeting between the U.S. president and North Korean dictator Kim
Jong Un on Tuesday morning in Singapore. South Korean President
Moon Jae-in had already proposed Trump for the prize following the
Panmunjom talks between North and South Korea that preceded the
summit.

Some of Trump’s fans gave him credit for achieving peace
in our time even before the summit, chanting “Nobel, Nobel,
Nobel” at a rally in late April. But the truth is that if
there is a trip to Norway in the offing, Moon himself will be a far
more deserving winner than Trump, even if his modesty — or
cunning — means giving Trump the credit. And much as we might
dislike it, Kim probably belongs on the stage too.

Talk of the peace prize is obviously premature. Trump’s
meeting with Kim had great visuals, but there was no real deal
struck and certainly no pledge of denuclearization from the North.
And this isn’t the first summit to cause hopes to soar for
inter-Korean reconciliation.

The blusterer-in-chief
might blunder into a good deal with North Korea. But that won’t
happen without the actions of several worthier
candidates.

Still, definitive pessimism is overdone. In important ways, Kim
appears different from his father and grandfather — more
interested in economic development, more comfortable on the
international stage, and perhaps even serious about a deal, though
one that won’t come cheap.

But let’s optimistically assume that the deal does make
substantial progress — if not toward the “full and
speedy denuclearization” the Trump administration insists
upon, then at least toward a formal peace on the peninsula and a
serious thaw in relations between North and South.

Denuclearization is desirable but not essential for American
security, because a nuclear North Korea could be deterred. Thus,
understandings short of full nuclear disarmament still could leave
the peninsula more stable. A freeze on missile and nuclear
development, especially if backed by inspections, could promote
peninsular and regional peace and stability. Conventional forces
and deployments also could be adjusted to make war less likely.
Regular communication could be established. Any of these would
represent significant progress in a region where hostilities have
flared for decades.

If so, should Trump be standing on the stage in Oslo?

The theory is that by trading insult for insult and threatening
to blow up Northeast Asia, the president frightened North Korea
into coming to the table. That might seem plausible, but Kim seems
like a man confident in his power, not scared. North Koreans I
spoke with last year seemed …read more

Source: OP-EDS

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America's Entitlement Crisis Just Keeps Growing

June 13, 2018 in Economics

By Michael D. Tanner

Michael D. Tanner

One problem with living in times as interesting as these is that
important news often gets lost amid the swirl of rapidly changing
events. If you blinked last week, you may have missed the latest
report from the trustees of the Social Security and Medicare
systems. But for the sake of our children and grandchildren, not to
mention the country’s economic future, America’s
looming entitlements crisis is worth paying attention to.

Start with Social Security. This year, the system’s
trustees pegged its official “insolvency” date at 2034,
the same as in last year’s report. Unfortunately for those
under age 51, of course, we are now a year closer to that date than
we were a year ago. And unless something changes dramatically
between now and then, current law will require benefits to be
slashed by 21 percent at that point.

But focusing on that top-line number badly understates Social
Security’s real problems. Since 2009, Social Security has
taken in less in taxes than it pays out in benefits. It has been
using “attributed” interest to maintain a positive
balance. But this year, benefits exceeded both taxes and interest,
meaning that Social Security had to dip into the principal of the
Social Security Trust Fund for the first time.

A new government report
suggests that Social Security and Medicare are in even worse shape
than you thought.

Of course, all of this is merely a bookkeeping fiction. The
Social Security Trust Fund is not — and never has been
— an asset that can be used to pay benefits. Instead, it is
an accounting measure of how much money Social Security can draw
from general revenues. Since the government doesn’t have any
extra cash socked away — you may have noticed that we are
running a $21 trillion debt — any Social Security shortfall
only adds to the growing tide of red ink.

Overall, the trustees report that Social Security’s total
unfunded liabilities now exceed $37 trillion, on a
discounted-present-value basis over the infinite horizon.

And that’s the good news. Medicare is in even
worse shape. This year’s trustees’ report estimates
that the health-care program for seniors will hit technical
insolvency by 2026, three years sooner than last year’s
estimate. The program’s worsening financial condition is
traced to “higher-than-anticipated spending in 2017,
legislation that increases hospital spending,” and higher
payments to private Medicare Advantage plans. Congress also
repealed the Independent Payment Advisory Board (IPAB), an
Obamacare provision that would have limited provider
reimbursements.

Again, as with Social Security, focus on technical insolvency
understates Medicare’s negative impact on the federal budget
because of its reliance on Trust Fund accounting. In actuality,
Medicare has been running …read more

Source: OP-EDS

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What Gina Haspel's Confirmation Really Represents

June 12, 2018 in Economics

By Sahar Khan

Sahar Khan

Gina Haspel was sworn in as the Central Intelligence
Agency’s (CIA) first female director on May 21, 2018
following a controversial nomination period and a contentious
Senate confirmation hearing. While Haspel is qualified for her new
role—she is a career intelligence officer with 33 years of
service in the CIA—her appointment is troublesome because of
her involvement in the United States’ torture program and endorsement of destroying interrogation tapes of key terrorist
suspects.

In the context of U.S. foreign policy, her appointment
represents two troubling developments: an erosion of checks and
balances on the executive, and a potential “torture redux.”

A president’s constitutional powers are complicated, and
law professors are often divided on the issue of the scope and limits of
presidential power. Haspel’s advocates argue that she would
be in a unique position to restrain President Trump, who publicly voiced
support of torture, especially as his inner circle is filled up
with like-minded advisors. And she would be able to
do so for two reasons. First, her main focus is to improve the
CIA’s operational capacity—something former director
John O. Brennan also sought to do during his tenure at the CIA. During her swearing-in ceremony she
discussedboosting the agency’s
foreign-language proficiency, strengthening intelligence sharing
with allies, and deploying more covert officers abroad to better
serve as a foreign intelligence service. Second, she has a good professional relationshipwith Secretary of
State Mike Pompeo, having served as his deputy when he was the
director of the CIA before accepting his current position. Yet,
there was little discussion on how increasing the CIA’s
capacity might impact its tendency to inflate threats. For example,
declassified CIA documents from the 1950s and 1960s revealed that
the United States significantly overestimated the number of Soviet missiles. In January
2018, then CIA Director Pompeo spoke of the growing threats from China and Russia, though
there is a great deal of skepticism surrounding this claims. What is
even unclear is how Haspel will address the problem of threat
inflation.

I am preparing for the
continuation of a poorly informed hawkish foreign policy that will
result in misguided hardline approaches, troop increases, and a
sidelining of diplomacy. I just hope it does not include torture’s
comeback.

The U.S. torture program began under the Bush administration via
an executive order in 2002. President Barack Obama
ended the CIA’s enhanced interrogation techniques in 2009 but
opted not to pursue accountability for those
involved— one …read more

Source: OP-EDS