Saturday, October 19, 2002


ABOUT THAT HYPOCRISY CHARGE: My Friday post on North Korea prompted an e-mail from the MinuteMan. He points out that the administration is not acting hypocritically, because the pre-emption doctrine does not imply that the U.S. will always use force to deal with the proliferation of weapons of mass destruction. He's right. This section of the National Security Strategy concludes:

"The United States will not use force in all cases to preempt emerging threats, nor should nations use preemption as a pretext for aggression.... We will always proceed deliberately, weighing the consequences of our actions."

Fair point, and consistent with what I said about all foreign policy doctrine having necessary wiggle room. But to be clear, the reason I said the Bush administration was being hypocritical was not that they were threatening to use force on Iraq but not North Korea. The hypocrisy stems from the administration's claim that the situation in Iraq merits force because that country's leadership is more evil. The reason the situations are different has everything to do with power politics and nothing to do with a "malevolence gap."

posted by Dan at 09:14 AM | Trackbacks (0)

Friday, October 18, 2002

EU GRAB BAG: Speaking of

EU GRAB BAG: Speaking of hypocrisy, the European Union is always cited as an example of how countries can pool their sovereignty. Except, of course, when their national interests are threatened. EU members are already changing the rules for Eastern European entrants.

Meanwhile, Romano Prodi, the president of the European Commission calls the macroeconomic rules underlying the Euro "stupid." (Here's the Google-translated Le Monde article). Prodi may well be correct on the economic fundamentals, but what's interesting in the Financial Times story is the suggestion that Prodi is attempting a power grab. The money quote: "It is clear that nobody has authority - that is the problem."

posted by Dan at 03:40 PM | Trackbacks (0)

Some intellectual honesty

The Bush administration is tying itself into knots over how the situation in North Korea is difference from Iraq. This New York Times article provides a fair characterization of the claimed differences, and &c tries to demolish them. Even more disconcerting is this Times story suggesting that Pakistan has been helping North Korea.

With these revelations, I’m predicting a lot of blogs crying hypocrisy over the next few days. The neocons will ask why North Korea gets the white glove treatment instead of “pre-emption”; the left will ask why Iraq doesn’t get the white glove treatment instead of pre-emption. My thoughts:

1) The hypocrisy charge sticks. Some intellectual honesty, please: The Bush administration rationales for why North Korea is different from Iraq don’t hold up. The claim that North Korea is weaker than Iraq doesn’t stick; indeed, this Chicago Tribune story suggests the reverse is true. The argument that negotiating with North Korea sometimes bears fruit doesn’t hold up, since the best evidence that negotiations work – the 1994 Framework Agreement – is now in tatters. The hairsplitting claim that Saddam Hussein has committed genocide while the DPRK regime hasn’t rests on the dubious argument that gassing a different nationality is somehow more evil than permitting one’s own nationality to face mass starvation. Face it: both of these countries belong on the axis of evil.

2) Welcome to realpolitik. Why, then, is the U.S. going after Iraq while “consulting” on North Korea? It’s not because pre-emption can’t apply to both countries; it’s because the power politics of the Middle East are radically different from those of the Far East. Invade Iraq, and no other great power’s sphere of influence is dramatically affected; the Middle East will remain an American bailiwick for quite some time. North Korea borders China and Russia; a pre-emptive attack against Pyongyang understandably ruffles more feathers.

3) North Korea can be temporarily handed off to others -- Iraq can't. No other great power can influence Iraqi behavior, so it’s up to the United States to do what only the United States can do; threaten and use force. Geopolitics raises the costs of a pre-emptive U.S. attack on North Korea, but those same geopolitics also renders North Korea more vulnerable to multilateral pressure. On the Korean peninsula, Russia and especially China have incentives similar to ours; get the DPRK to give up its WMD capabilities. These countries value stability in the region and trade with South Korea. Chinese and Russian coercive pressure has forced North Korea into making concessions in the past. Coercion in the present won’t permanently solve the problem, but it will -- temporarily -- arrest North Korea’s nuclear program.

4) This is how foreign policy works. Neoconservatives and Wilsonians expecting consistency will cry foul, but in a world where even American resources are finite, no foreign policy doctrine will ever emerge unsullied by foreign policy practice. At the same time, I doubt any administration could ever officially provide the explanation I just did. In foreign policy, one can act in a hypocritical fashion, but never admit to acting in a hypocritical fashion.

posted by Dan at 02:14 PM | Trackbacks (0)


WHY IS THE U.S. SO INNOVATIVE?: It's considered de rigeur to moan and bitch about the economy right now, but this overlooks a key point, which that even in the current slowdown, the productivity of American firms and workers remains quite high. Boosting productivity is the holy grail of economics, because when it happens, everyone wins -- the economy can grow faster and real wages can rise higher without triggering inflation.

At present, and for the last decade, U.S. productivity growth has outpaced both Europe and Japan. The proximate reason is that the United States has been better at exploiting information technologies (IT) than our allies. A recent NBER paper confirms that IT has lead to productivity surges across the board; an IMF study makes it clear that Europe has yet to experience those spillovers.

The question that remains is, why is the U.S. so good at exploiting innovation? Robert Shapiro has a Slate article explaining why. The killer line (though see below):

"It's the combination of innovation in technology and business operations that usually produces the big benefits. And that's probably why we see no productivity rise in Japan or much of Europe, where IT investment has been nearly as high as here: Labor regulations and other barriers inhibit companies' abilities to use their new IT to change the way they do business."

Will Japan or Europe alter their regulatory structures to permit innovation to flourish? As a Mancur Olson fan, I'm pessimistic.

Now, I'm sure many readers are feeling pretty smug right now, thinking that this is another example of Yankee know-how. But in the long run, this is not a good thing for the U.S. With regard to foreign relations, as Jonah Goldberg notes today, the current gap between the United States and its principal allies is military -- we spend a lot on defense and they don't. If current productivity and demographic trends continue, however, in fifty years the U.S. economy will dwarf both Japan and the combined EU, and the gap will be ever-increasing as these economies shed people. I fear that the problem of "burden-sharing" will return with a vengeance, since these countries may lack both the resources and the manpower to even defend their own countries. As for our economy, we want Japan and Europe to grow, since when they grow, demand for U.S. exports rise.

Developing.... over the next 50 years....

UPDATE: Reader Thomas H. pointed out that the Bush administration is aware of this problem. The much-discussed 2002 National Security Strategy observes:

"A return to strong economic growth in Europe and Japan is vital to U.S. national security interests. We want our allies to have strong economies for their own sake, for the sake of the global economy, and for the sake of global security. European efforts to remove structural barriers in their economies are particularly important in this regard, as are Japan’s efforts to end deflation and address the problems of non-performing loans in the Japanese banking system."

U.S. pressure on Europe and Japan to change their domestic economic institutions are unlikely to work, however, unless significant economic interests within these countries also push for change (this point courtesy of Leonard Schoppa). The problem is, these groups all have vested interests in the current institutional set-up.

ANOTHER UPDATE: If you read Shapiro's Slate article, you'll see that he tries to imply that the Bush tax cuts will actually stifle innovation by raising long-term interest rates. Shapiro is right about the relationship between the two, but he's exaggerating the magnitude of the effect. &c (or is it now etc.?) is on the case.

posted by Dan at 10:10 AM | Trackbacks (0)

Thursday, October 17, 2002

Stopping terrorist financing

For years, individuals and charities based in Saudi Arabia have been the most important source of funds for Al-Qaeda. And for years, Saudi officials have turned a blind eye to this problem.

That's one of the findings of a Council on Foreign Relations task force report on combating terrorist financing. The report also criticizes the Bush administration for not following through on the initial burst of momentum in cracking down on terrorist financing late last year.

The allegation against Saudi Arabia is dead-on accurate. When I was at Treasury, it was commonly acknowledged that all of the Gulf Cooperation Council countries did not take money laundering or terrorist financing seriously. The allegations against the Bush administration are 50% accurate -- the overreaching is probably due to the fact that the principal authors are ex-Clinton officials, albeit very competent and professional ones. The devastating criticism is that the administration appears reluctant to use the Financial Action Task Force (FATF) or the Egmont Group -- the chief international anti-money laundering organizations -- to blacklist and potentially sanction countries that are lax on terrorist financing. A similar approach to crack down on countries that laundered drug money was extremely effective in 2000 and 2001. One reason it was so effective was that the U.S. was unafraid to threaten sanctions against "politically sensitive" countries such as Israel and Russia. Blacklisting the Gulf countries is an option that needs to be on the table, even if it's awkward for FATF [Why would it be awkward for FATF?--ed. Because the Gulf Cooperation Council is a member of FATF, but its member countries are not. This has allowed Saudi Arabia and the other Gulf nations participate in all FATF deliberations while claiming that they don't need to strictly adhere to FATF standards. This use to drive me crazy at FATF meetings. The whole enterprise was a joke to them, and they were not afraid of displaying their contempt].

posted by Dan at 09:41 PM | Trackbacks (0)


SO MUCH FOR THE NORTH KOREA ANALOGY: Two weeks ago, I posted some grafs on how the example of North Korea posed problems for pro-war and anti-war positions on Iraq. Well, after yesterday's revelation that North Korea has been actively developing nuclear weapons, the problems for the pro-war position have pretty much evaporated, while posing much more acute problems for the anti-war position. North Korea was considered to be an example of how patient dialogue, multilateral consultations, and inducements could achieve what coercive diplomacy could not. Clearly, that has turned out not to be true. For an excellent summary of North Korean noncompliance with the 1994 Framework agreement, go to the IAEA's informative web page.

Perhaps this will also debunk the notion that North Korea was engaging in true reforms, when what it was really doing was engaging in a clumsy PR offensive. For an example of how clumsy, click here.

UPDATE: Geithner Simmons makes similar points. And this event has brought out the neocon in &c.

ANOTHER UPDATE: InstaPundit thinks the North Koreans came clean because they don't want to be the next Iraq. Sorry, Glenn, that dog won't hunt. They didn't just admit to the weapons program; they also went out of their way to declare the 1994 Framework Agreement null and void. The DPRK leadership is just as insular and ill-informed about the world as Saddam Hussein, so ascribing "rational" motives can be dangerous. My guess, however, is that they were honest for the opposite reason -- they know the U.S. is preoccupied with Iraq and are trying to exploit the situation. They think the administration will try to buy off Pyongyang to keep them quiet when they move against Iraq. Based on the initial U.S. response, they may be right, though I strongly suspect the Chinese will not be pleased about these developments. This Washington Post story suggests the same.

posted by Dan at 04:56 PM | Trackbacks (0)

Tuesday, October 15, 2002


OFFLINE TIL FRIDAY: I'm giving a talk at Dartmouth tomorrow, so no posts until Thursday evening at the earliest. Talk amongst yourselves. Here's a topic: why international law justifies an U.N.-supported attack against Iraq but not Israel.

posted by Dan at 09:09 PM | Trackbacks (0)


IT'S NOT AN AMERICAN PROBLEM -- IT'S A CIVILIZATIONAL PROBLEM: I don't have much to say about the recent flurry of Al Qaeda attacks that hasn't already been said or highlighted in the Blogosphere. One point worth stressing is that they are against the West writ large rather than America. It was a French tanker that was bombed in Yemen; the Al Qaeda note sent to Al-Jazeera notes, "the attackers struck at the umbilical cord of the Christians." As for the Bali bombing, the New York Times observes:

"The tally of those who have been identified testifies to Bali's international appeal as a gathering spot for young foreigners. It includes victims from Indonesia and Australia as well as from Britain, Sweden, Singapore, Ecuador, Holland, France, Germany, Korea and the United States."

My point? Because Al Qaeda has made it clear that it considers its enemy to be pretty much everyone, the coalition fighting the war on terror will be strengthened and not weakened by the latest attacks. The Bali bombing has already had a salutory effect on the Indonesian government. Furthermore, since these governments are supporting the war on terror for self-interested reasons, it is highly unlikely that an attack on Iraq will reduce multilateral cooperation in this sphere, despite what the editorial and op-ed page of today's New York Times suggests. And, as even the Times editorial admits, "Fighting loosely linked and mobile terror cells is an entirely different operation from invading Iraq"

Finally, Ralph Peters makes a good case that these attacks demonstrate Al Qaeda's growing weakness rather than its growing strength.

posted by Dan at 11:59 AM | Trackbacks (0)

Monday, October 14, 2002


EXCHANGING INFORMATION WITH THE BUSH ADMINISTRATION: The New York Times has a story on the paucity of information the Bush administration gives to the press. The article said White House reporters, "could not remember a White House that was more grudging or less forthcoming in informing the press." Half of the article sounds like the griping of journalists who are having difficulty finding good sources; the other half sounds like genuine frustration at the lack of even official access to the decision-making echelons. It is also consistent with the administration's eagerness to keep government documents classified for as long as possible.

This story reminds me of multiple off-the-record conversations I've had with foreign policy analysts on both sides of the political fence. They agree on one thing. If the administration resists the release of information it provides to the press, it is positively allergic to the receipt of information from unofficial sources. The administration seems so sure of itself that any outside input falls on deaf ears. One result of this is that when the administration does try to engage the public, they do it in a ham-handed, tone-deaf way, as the economic team is finding out.

This is usually presumed to be a bad thing; I think the answer is a lot more complex. All governments distrust outside information to some extent. In The Secret Pilgrim, John Le Carré's George Smiley made the point that "governments, like anyone else, trust what they pay for, and are suspicious of what they don't."

Also, consider the alternatives. This administration's attitude towards information is about as far from the Clinton administration as you can get. That administration leaked, spun, and released information more often than Britney Spears exposes her navel. The Clinton team was equally eager to bring in outside experts, as Benjamin Barber has so gleefully recounted. I certainly don't think you can say that the previous administration's foreign policy record is better than the current one.

My suspicion is that an administration's policy towards outside information involves two tradeoffs.

The process tradeoff is between consultation and coercion. What Clinton and his team excelled at was building as large a tent as possible to maximize support for a particular foreign policy. Allies, Congress, outside experts felt like they were being stroked, even when they lost on the substance. This kind of tent-building takes time and effort, but it pays dividends in the long run. The Bush team, in contrast, is more willing to threaten to exclude or ostracize those actors that disagree with its viewpoint. The results have often been effective -- hence the Bush team's success in cajoling Congress, the allies, and potentially the United Nations into action on Iraq. One side-effect, however, is that because those on the outside feel like they are not being truly consulted, they will carp about it to others who are not being consulted. The result is a media perception of an administration that has forced a confrontation on Iraq in a unilateral, belligerent fashion, when in fact this confrontation has had more due process than the Clinton team's decision to bomb Kosovo. The Bush approach leaves hard feelings, but it also yields results.

The substantive tradeoff is between decisiveness and accuracy. Clinton wanted all angles of a story, and he got them. The result was a foreign policy that often resembled a Cubist painting: too many perspectives distorting the picture. In other situations, the Clinton team seemed so uncertain of themselves that they preferred to delay making a risky decision in favor of acquiring more information. It preferred delaying a decision in which it had 60% of the story in favor waiting until it had 90% of the story. This lead to the perception of a foreign policy team paralyzed by its inability to take a risk. [Any exceptions?--ed. Yes, the 1995 bailout of Mexico was both brave and decisive.] Sometimes the costs of delay were prohibitive. The Bush team, in contrast, does not lack in self-confidence. They see the forest from the trees, and are willing to make the big decisions even when they have only 60% of the picture, which in the real world is a useful skill. As Nicholas Lehmann notes, in discussing his article on Condi Rice in The New Yorker, "Rice is extremely sure of herself. She, like many of the foreign-policy officials in this Administration, isn't big on caution. Publicly, at least, she projects a brassy self-confidence about the ability of the United States to shape the course of events in faraway places without suffering adverse consequences." The results (the war in Afghanistan, the ABM withdrawal) have been mostly for the good. [Any exceptions?--ed. I think if they had a second chance they would not have pulled out of the Kyoto Protocol so brusquely.] So far, the Bush team seems to have managed this tradeoff better than Clinton team. They've gotten the big things right, which has probably reinforced their willingness to act on their own instincts even further.

My preference is for an administration that adopts 67% of the Bush team's approach and 33% of the Clinton team's approach. The two downsides to the Bush approach I can see are 1) As Fareed Zakaria has argued, this unwillingness to listen to outsiders will encourage the worst interpretations of American behavior, and 2) If the Bush team makes a mistake, it will be more likely to resist a change in direction.

Food for thought.

UPDATE: This USA Today article suggests that the Times piece had some effect on Bush.

posted by Dan at 09:24 PM | Trackbacks (0)


A TRUE LIBERAL: I don't always agree with Vaclav Havel, but nevertheless it is easy to descend into hagiography when discussing him. His September 19th address in New York, republished in the New York Review of Books, is typically eloquent. He is both personally and politically humble. He notes wryly, "The warning voices of poets must be carefully listened to and taken very seriously, perhaps even more seriously than the voices of bankers or stock brokers. But at the same time, we cannot expect that the world—in the hands of poets—will suddenly be transformed into a poem." His three lessons of "high politics" are worth quoting in full; I'm not sure I completely agree with them, but I am glad someone of Havel's stature can articulate this viewpoint:

"(1) If humanity is to survive and avoid new catastrophes, then the global political order has to be accompanied by a sincere and mutual respect among the various spheres of civilization, culture, nations, or continents, and by honest efforts on their part to seek and find the values or basic moral imperatives they have in common, and to build them into the foundations of their coexistence in this globally connected world.

(2) Evil must be confronted in its womb and, if there is no other way to do it, then it has to be dealt with by the use of force. If the immensely sophisticated and expensive modern weaponry must be used, let it be used in a way that does not harm civilian populations. If this is not possible, then the billions spent on those weapons will be wasted.

(3) If we examine all the problems facing the world today, be they economic, social, ecological, or general problems of civilization, we will always —whether we want to or not—come up against the problem of whether a course of action is proper or not, or whether, from the long-term planetary point of view, it is responsible. The moral order and its sources, human rights and the sources of people's right to human rights, human responsibility and its origins, human conscience and the penetrating view of that from which nothing can be hidden with a curtain of noble words—these are, in my deepest convictions and in all my experience, the most important political themes of our time."

posted by Dan at 01:23 PM | Trackbacks (0)