Sunday, March 29, 2009

Wes Riddle’s Horse Sense #391

Defense Needed Against More Than Terrorism
by Wes Riddle

In the course of fighting the Global War on Terror, a strategic failure of the first order has occurred. Namely, the United States is still not fully prepared to defend itself against a ballistic missile attack from Russia, China or even the Iranians if they happened to launch a missile attack from a ship. The U.S. possesses a limited missile defense consisting of a small number of ground-based interceptors. Besides the Patriot weapon system, the Army’s next generation of hit-to-kill interceptors have been under development for over a decade but are only now nearing completion for deployment in the next year or so.

Given the economic crisis and relative reordering of priorities in Washington, lawmakers are already talking about substantial cuts in ballistic missile defense. Ironically this comes at a time when Iran and also North Korea are increasing their ballistic missile activities. Recall that these were two of the countries George W. Bush characterized as comprising an “Axis of Evil” (the third was Iraq). His terminology sounded strange at the time, but his point is accurate if by “evil” he may have meant harboring significant ballistic missile arsenals. Of course Saddam had few operable missiles remaining, and nowhere near the numbers intelligence sources reported before U.S. invasion in 2003. North Korea and Iran possess numbers that are far greater by several orders of magnitude than anything we ever ascribed to Iraq.

The same can be said for our very limited sea-based capability against ballistic missiles too. The Navy Aegis was certified in March as being effective at short-range intercepts of missiles reentering the atmosphere, and it had previously been certified against longer-range missiles flying above the atmosphere. Great in terms of capability, except that such capability will only be installed on 18 ships by June 2009. Few of these ships will be home-ported for at least a year, and that’s if there’s no significant cut in spending. Meanwhile, for all the talk of Star Wars the U.S. has no space-based system to defeat missiles in their early launch and ascent phase.
America is strong not invincible. Moreover, U.S. strength is based on hard work and smart thinking. Defense, foreign policy and intelligence communities are there to help, but it takes determined executive decision makers to get things done: to put real boots on the ground, satellites into space, and to procure and deploy the various weapons required for defense, retaliation and deterrence. This applies towards terrorism, but it also applies towards ballistic missile defense (BMD) and towards nuclear retaliatory capability and nuclear deterrence. Yet somehow the threat of nuclear missile attack has seeped from our minds, as if because it didn’t happen during the Cold War it never will.

If Islamic terrorists ever got nukes, it is clear they would use them. If they controlled nuclear states like India or Pakistan or took over even for a short time, they might have a real opportunity—perhaps not to strike our Homeland but clearly to threaten vital interests and possibly decimate an ally. Such terrorists, however, do not pose the only threat to America of nuclear attack or blackmail. Strategic rivals possessing nuclear weapons during the Cold War haven’t entirely gone away, so it is hard to reckon our complacence and slothfulness at BMD.

Nuclear powers Russia and China threaten our security now as much as they did during the 1980s, and even more so today in the case of China. In addition, Iran aspires to threaten us and to undermine our security and will likely do so in the not too distant future. Iran is working hard to acquire nuclear weapons, and experts argue only over how many more years it will take before they have them. We very much want Russia to be a peaceful member of the community of nations, and for a while it looked like they might be. But recent events in Georgia suggest the bets are off, and anyway Russia will continue to seek what its non-democratic rulers believe is in their interest. Sometimes this will coincide with our interests and many times it won’t. In either case, Russia has thousands of nuclear warheads and ballistic missiles. It is proceeding to modernize its military and enhance its capability to influence world events.

Nor one should add did victory in the Cold War cause a sudden dawn of democracy in communist China, or inhibit it from modernizing its military. China has over two million men under arms, so the nuclear advantage and BMD are crucial to the United States vis-à-vis China. China possesses a minimum of 30 intercontinental ballistic missiles, most of them aimed at the United States, as well as hundreds of short and medium range nuclear missiles for use in a theater of combat in Asia. Today the Chinese are building and testing more than one ballistic missile per week! We ought to connect the dots, as Chinese military thinking is unabashedly anti-American. Its military journals are full of candid accounts about unrestricted warfare with the United States using a combination of conventional, cyber, economic and nuclear warfare, as well as terrorism. China is also working to close the space gap, to develop space-based military capabilities including manned launch vehicles, a space station, and extensive anti-satellite weaponry to negate U.S. global satellite coverage.

The Global War on Terror is real, but it isn’t the only conflict scenario and not even the most obvious. We have known the United States requires a BMD shield for decades. It is about time we move ahead to complete it.

Sunday, March 22, 2009

Wes Riddle’s Horse Sense #390

Rise and Fall of Empires
by Wes Riddle

Success of a given empire has a lot to do with what, say, the imperial power does—but it also relies on conditions quite outside itself. For instance, British domination after 1800 depended upon the wisdom of imperial direction and on naval supremacy but also on the internal turmoil of China, self-seclusion of Japan, subjection of Mughal power in India, and disintegration of Ottoman rule in southeast Europe and parts of the Middle East. The vacuum and weaknesses abroad therefore facilitated the rise of the British Empire. Likewise, while internal weaknesses and strategic errors may have played a role—so did the conditions extant around the world as the sun finally set on the British Empire in just the past century. Now if we were to reverse perspective, the United States of America and its sphere of influence today is much the rest of the world to emerging empires. The contemporary rise of China and India for instance, albeit amid the process of globalization, depends upon relative strengths and weaknesses in what Jefferson once called our own Empire of Liberty or what passes today as such anyway.

It is interesting to consider how quickly the British heyday passed by. Its fortune and security has been inextricably tied, indeed dependent on ours since World War II. They were only on top of things as it were for a couple hundred years. In terms of American development and experience we have been about a hundred years behind at almost every stage of empire since the Revolutionary War compared to Great Britain. Industrialization occurred in the United States a hundred years behind theirs for instance. Moreover, American ascendancy was an early Twentieth Century phenomenon, so harbingers of the Twenty-First Century are dire. As Oxford historian John Darwin has observed after analyzing six hundred years between 1400 A.D. and the year 2000—tracing the rise and failure of countries during that timeframe, history demonstrates the mutability of fortune, sudden shifts in power, and unpredictable consequences of unexpected victories. In terms of the latter aspect the Cold War comes immediately to mind, how the U.S. “won” when the Wall came down to our utter shock and disbelief; and how it left us as the world’s only superpower; and how that status looks more tenuous and temporal than it did less than twenty years ago.

By “Empire of Liberty,” however, Jefferson did not mean anything akin to the British Empire or to what we have today. Indeed it is by becoming imperial of sort—encouraged certainly by the dangers and exigencies born of Great Depression, fascism and communism the United States may have stumbled into that role. Nevertheless, in so doing, we have become vulnerable to the same internal rot and uncontrollable circumstance vis-à-vis others in imperial competition, that effects decline of all such empires. For instance, years of overspending and borrowing by consumers, businesses and government, facilitated by the Federal Reserve, have precipitated a terrible credit and financial crisis. Panic has enabled Congress and the Executive branch to accrete unprecedented powers. General Motors (GM) for all intents and purposes is Government Motors. The banking and insurance industries both teeter on the edge of total nationalization. Meanwhile panic that previously gripped the country after 9/11 has given us a permanent Department of Homeland Security; and now the Department of Defense since October 2008 has assigned three active duty brigades deployed on American soil for homeland defense while the National Guard and Reserves (who could and traditionally would do those missions) are deployed overseas in fighting.

Power rarely makes careful distinctions, least of all concerning written constitutions. Extraordinary powers granted to government in response to some emergency are hardly ever rescinded after a precipitating crisis has abated. This unlikely process, however, may be what is required of us today, i.e., to retake powers granted to or assumed by the federal government. Michael Federici, professor of political science at Mercyhurst College has written that, “The Framers did not design the American Republic for imperial greatness, but when it functions as intended, it produces something even greater than empire: a free society with limited government and the rule of law.” In some ways that ‘something even greater’—what Jefferson meant by “Empire of Liberty,” has already receded if not altogether fallen away. The cumulative result largely of democratic actions, moving as it were from crisis to crisis, has created peril in the present and near future context. We now show all the pretensions of an empire built upon power in the classic Machiavellian sense, but that is precisely the type of empire, which has limited lifespan empirically over the last six hundred years of history.
The Founders wanted us to be around more than two hundred years at mortal zenith! They aspired to a permanence built upon the moral imagination, and they hoped for a free and virtuous people to keep their Republic, knowing full well that to keep it would entail disciplined subordination of purely economic considerations to whatever is good and true and ultimately imperishable, regardless of what others may do.

Monday, March 16, 2009

Wes Riddle’s Horse Sense #389

Market Entrepreneurs
by Wes Riddle

Between the generation of our Founding and World War II, there have been other “greatest” generations too. Perhaps the least appreciated in our time has been that post-Civil War generation of market entrepreneurs, who led America from being a second tier economic power to being the industrial powerhouse of the world. In today’s economic downturn, it is perhaps helpful to remember the method that led to the most success before, as well as those ways that did not work in the past. One distinction that needs to be raised immediately is one between market entrepreneur and political entrepreneur. Businessmen aren’t angels and neither are congressmen or plain folk, but competition tends to bring out better performance in people, whereas subsidization from public (tax) money risks funding and perpetuating substandard performance and inefficiencies.

Businessmen will often try to get favors or handouts from the government, because it may be easier than gathering together the necessary venture capital. Very often after that first taste, they return again and again to the same trough rather than wean off the public dole. The market entrepreneur pursues his business privately through private means. The political entrepreneur is in league with government, to the extent that he pursues his business semi-privately but through means that are exclusively or partially public. Then as today, political entrepreneurs are hard to avoid and even harder to get rid of, even though they are a drag on economic vitality and injurious to the wellbeing of the country. Market entrepreneurs go about their business freely and mostly wanting to be left alone, creating wealth and growing the economy. Government gets big off taxing productive market entrepreneurial activities, ironically enabling far too many government payouts to leeches in the business community of a political entrepreneurial bent.

Regulated bailouts could be the worst of all worlds if it institutionalizes business dependency on the government over the long haul and/or results in the permanent bureaucratic management by government of a private sector activity. Some historical examples are instructive. In the 1840s a political entrepreneur approached Congress to help him develop the U.S. steamship route between New York and Liverpool, and to cut into the business of rival English ships. Since the British government subsidized shipping, our man Edward Collins said he would need $3 million of taxpayers’ money to construct five vessels and then an annual subsidy of $385,000 to drive passenger fares down low enough to compete.

Playing on congressional fears of British domination in trade, Collins got his money. He only built four ships, but who’s counting. While he promised to phase out the annual subsidy, he was soon lobbying for more, and more, and more (up to $850,000 per year). Cornelius Vanderbilt tried to get in on the action too but by offering a cheaper deal, however the Congress had formed a cozy relationship with Collins so it turned him down. Forced to compete entirely, he used privately financed and self-insured vessels, slowed the ships’ speed down to save on fuel, and invented a new, cheaper passenger class called steerage. A year later, Vanderbilt’s operation was flourishing while Collins was even worse off and returned again to Congress asking for higher subsidy. When two of his ships sank because of poor maintenance and running the engines too fast, Collins had to resort to Congress for their replacement value. The Senate finally got wise after looking into the management practices, and no doubt comparing results and bottom line with that of Vanderbilt’s operation. Collins lost his subsidy and within a year went bankrupt, enabling Vanderbilt to pick up more of the business privately, at less cost and far better value to customers—not to mention dominance of the seas from an American side.

A decade or so later Congress began subsidizing political entrepreneurs representing transcontinental railroad ventures: the Union Pacific, the Central Pacific, and later the Northern Pacific. The government gave these companies tens of millions of acres of free land and tens of millions of dollars, and because the companies had no incentive to be efficient, the railroads evidenced shoddy construction, as well as circuitous routes and uneven grades. The privately funded railroad called Great Northern, however, was a success that put the others to shame. James J. Hill built his line for durability and efficiency and without government money, taking the shortest distance, lowest grades and least curvature that he could. He also supervised construction and imported the very highest quality Bessemer rails. Although these cost more up front, they also lasted a long time and were more dependable. He took the same approach to his railroad bridges, constructing the solid granite Stone Arch Bridge 2,100 feet long and 82 feet high across the Mississippi River—a Minneapolis landmark for many decades.

Similar stories mark the success of Andrew Carnegie in steel, and John D. Rockefeller in oil. These men were market entrepreneurs not “robber barons.” They created wealth and propelled the United States to first rank economically in the world. Moreover, so far as generations go, they stood head and shoulders above the risk-averse, sycophantic and slinking political entrepreneurs, who pass for so many CEOs and leaders in American business today.