Interventions, Economics, and Giant Killings
November 13th, 2006The Iraq Survey Group, or as it should be known, The President’s Father’s Friends Intervention on Iraq, is meeting with Bush today and is soon to deliberate on a course to take in that country, with the expectation being that they’ll conclude few good options.
Tuesday’s dramatic election results, widely seen as a repudiation of the Bush Iraq policy, has thrust the 10-member, bipartisan Iraq Study Group into the kind of special role played by the Sept. 11 commission. This panel, led by former secretary of state James A. Baker III and former Indiana congressman Lee H. Hamilton (D), might play a decisive role in reshaping the U.S. position in Iraq, according to lawmakers and administration officials.
Those familiar with the panel’s work predict that the ultimate recommendations will not appear novel and that there are few, if any, good options left facing the country. Many of the ideas reportedly being considered — more aggressive regional diplomacy with Syria and Iran, greater emphasis on training Iraqi troops, or focusing on a new political deal between warring Shiites and Sunni — have either been tried or have limited chances of success, in the view of many experts on Iraq. Baker is also exploring whether a broader U.S. initiative in tackling the Arab-Israeli conflict is needed to help stabilize the region.
I’ve taken the liberty of boldening the things that I’d suggest as good places to start, but I very much agree with this piece, too, which says that the President should call for reinforcements in Iraq. The way I see it, we should begin a dialogue with the Syrians and Iranians, bolster our troop numbers in an effort to stabilize and train, set a one-year deadline and begin withdrawing our troops, first taking out all the extra reinforcements and then, over the next six months, phasing out the majority of our soldiers but leaving some in an advisory position.
Fact is, we’re going to be — and we should be — in Iraq, to some extent, for the rest of our lives, and that’s not something we should run away from. Done right, Iraq can be Germany or Japan rebuilt. The next year is of the utmost importance.
Here, in the Washington Post, is an article on Rubinomics (Clintonomics, or, as I’d like to call it, Invest and Grow Economics) and, being a firm believer in the work of Clinton’s best Treasury Secretary, I thought I’d share some parts with you.
The Hamilton Project is the brainchild of Robert Rubin, Treasury secretary under Bill Clinton. Rubin’s great virtue was to be as free of ideology as is possible in politics and to recruit a team of clever pragmatists to work for him. Not every Cabinet secretary would choose an intellectual bulldozer as deputy — particularly one with a talent for political incorrectness. But Larry Summers could get to the right answer faster than most people could get out of bed, and that’s what Rubin cared about.
Two years ago, Rubin teamed up with Peter Orszag, a laser-brained economist at the Brookings Institution. He no longer controlled the Treasury, but he persuaded a number of fellow Democratic grandees to finance a center for Rubinomics in exile; and Orszag served as policy director, commissioning a series of creative pragmatists to grapple with the nation’s economic challenges. Anyone who laments the watery generalizations of the House Democrats’ election platform should check out http://www.hamiltonproject.org/ . It is proof that Democrats do have sophisticated ideas. They just need congressional leaders to adopt them.
During the recent congressional campaign, Democratic candidates mostly had the right diagnosis and the wrong prescriptions. They saw that middle-class and poor Americans have not experienced wage gains during the past five years of growth, and they saw that families are one health crisis away from financial hardship. But the Democrats’ remedies — bashing Wal-Mart, railing against globalization — offered little more than symbolism for the poor and middle class while promising damage to the economy.
The Hamilton people are just as ready to acknowledge that Americans are hurting. They note that the probability of an average family experiencing an income drop of half or more has jumped from 7 percent to 17 percent since the early 1970s; and that the average spell of unemployment has gone from 12 weeks to 16 weeks since the 1960s. But the Hamilton people have a better solution than protectionism.
Their first prescription is to encourage workers to save for themselves. A simple reform — requiring companies to make enrollment in a retirement plan the default option — would greatly boost savings, since many workers currently don’t enroll not because they don’t want to but because they don’t get around to it: One series of experiments found that making participation the default boosted coverage for newly recruited low-income workers from 13 percent to 80 percent. A recent law facilitated automatic enrollment in 401(k) accounts but did not require it; and the law did nothing for the more than 70 million workers at companies that don’t offer pension plans but that could nonetheless enroll workers in IRAs.
The Hamiltonians also advocate reform of government savings incentives. The current system of tax deductions favors the rich, because deductions are worth most to people in the highest tax brackets. A janitor who saves a dollar gets no help from the government, whereas a chief executive who saves a dollar gets a 35-cent tax subsidy. The Hamiltonians would replace this upside-down system with tax credits that are worth the same to everyone, irrespective of their tax bracket.
The Hamiltonians also have ideas on unemployment insurance. The existing system is designed to protect workers who lose jobs, though in practice eligibility restrictions ensure that only one in three gets covered. It is not designed to help workers who find new work at a much lower wage — even though the resulting hardship lasts longer. So why not create a new borrowing mechanism to help workers get through temporary layoffs, and use the savings to provide government insurance to workers who suffer acute wage losses?
In keeping with the Rubin pragmatism, some Hamiltonian ideas violate Democratic shibboleths. One paper demonstrates that teacher quality has nothing to do with whether a teacher is certified and argues that school principals should have the freedom to fire ineffective junior teachers — which would not thrill the teachers unions. But nearly all the Hamilton proposals have three things in common. They would reduce the inequality that Democrats emphasized on the campaign trail. They would not bust the budget. And they would promote economic growth. If the political system can’t make use of ideas that tick all these boxes, there is something desperately wrong with it.
It’s good, better than a missed New York Giants fieldgoal returned for a 108-yard touchdown, easy, which isn’t to discount the power of the Chicago Bears.