Friday, March 27, 2009

Trouble Brewing in Anbar

I've talked before on this blog about the tenuous nature of the security situation in Iraq. Contrary to the political triumphalism of some hawks in Washington who declared the surge a total success and the war essentially won, the military leaders on the ground have much more mixed feelings.

Yes, the surge played an important role in quelling violence in Baghdad. However, just as important (and possibly more important) were two lucky developments that helped decrease violence. In late 2007, Moqtada al-Sadr -- a popular cleric and leader of the largest Shiite militia in Iraq -- declared a unilateral ceasefire, ending attacks on American troops. Since Sadr's Madhi Army was responsible for much of the violence in Baghdad, and also provoked retaliatory Sunni attacks, the ceasefire immediately and drastically decreased the level of violence.

The other important development, which first appeared just as the idea of a surge was appearing in Washington, was a trend of Sunni militias turning against al-Qaeda in Mesopotamia (AQM). AQM was a partly foreign group, once commanded by the infamous Abu Musab al-Zarqawi, which perpetrated the most heinous and bloody attacks against innocents in Iraq.

In 2005 and 2006, Sunni militias gradually turned against AQM, first targeting both AQM and American forces, and eventually stopping attacks on Americans altogether. American commanders jumped at this opportunity, offering the Sunni militias money to work with them and offering to incorporate them in the official Iraqi security apparatus. Termed the "Anbar Awakening" or the "Sunni Awakening", this move effectively stopped attacks on US forces by most Sunni militias. As a result, violence decreased even further, to the point that Iraq was seen as generally stable and secure.

This general stability continued throughout 2008, but is now being threatened. As a result of financial difficulties caused by a drop in oil prices, the Iraqi government was only able to give jobs in the Iraqi security force to 5,000 Awakening members. This left 95 percent of the total Sunni militia members in the program without a source of income. Since most of these militia members attacked US forces out of a need for income, and joined the Awakening for the same reason, this is a very troubling sign.

Combined with a general mistrust between the Shiite government and these Sunni Awakening members, this breakdown in the Awakening agreement has many Sunnis threatening to rejoin the insurgency. Some groups have already resigned from the Awakening Council, citing the lack of jobs and hostility from the Shiite government.

One Awakening leader remarked, "Until now, promises are all we’ve gotten. When the government does not even pay them enough to stay alive, Qaeda and armed groups are ready to pay them generously."

Experts on the situation in Iraq are concerned with these developments, but say that the situation is not yet out of control. Counterinsurgency expert Thomas Ricks commented that he was not yet "hitting the panic button," but said that the Sunni-populated area west of Baghdad could become "the emerging battleground between the Shiite-dominated central government and the Anbar tribes."

A breakdown in the Iraqi security situation could have serious effects on the Obama administration's withdrawal plans, as well as plans for stepping up efforts in Afghanistan. If the Iraqi government does not act quickly to address the concerns of these Awakening members, they risk seeing their nation spiral once more into violence and chaos.

Changing Financial Leaders

The Financial Times has a must-see, interesting and informative interactive graph, which shows the world's biggest financial institutions and the countries in which they are based from 1999 to 2009.

If you move the slider at the bottom to the right, moving forward in time, you see American and British institutions falling quickly from the list, especially in recent years. Even more interesting is who is taking their place at the top: primarily institutions in China and Japan. It is no coincidence that these countries are the primary creditors to the US.

What we're seeing is the fall of America from global financial primacy, and its usurpation by more productive and financially responsible nations. America buried itself in debt -- both in the public and private sectors -- and exported its core productive industries. The result? Those who saved and produced while we were spending are reaping the rewards and rising to the top.

"Kabul is not Baghdad"

As the Obama administration prepares to launch what is being called an "Afghanistan Surge", it is more important than ever to recognize the considerable differences between Iraq and Afghanistan, and how those differences will affect strategy. A valuable guide to this topic was provided by US general Eric Olsen in a Christian Science Monitor article titled "Rethink the Afghanistan surge - A US general explains why the Iraq model doesn't apply."

Olsen provides an excellent overview of the situation, and does so in probably the most succinct way possible considering the complexity of the issues. So I'll quote him at length in order to convey the whole picture:

"Iraq is like New York State: both feature mostly urban populations with dominant capitals. Pacify the Big Apple and you pacify the whole state; pacify Baghdad and you pacify Iraq. But Afghanistan is more like Alaska: both have rural populations with capital cities far removed from large, mountainous regions. Baghdad alone accounts for 7 million Iraqis – about one-quarter of the population. In Afghanistan, barely one-tenth of the population lives in the five largest cities. Because Baghdad is the political and socioeconomic center of the nation, the calming effect of the surge there reverberated across the country. But there is no such city in Afghanistan.

"Living with the people" in Afghanistan will require a completely different configuration. It would require small numbers of US soldiers living in countless small villages, where they'd be unable to support each other in emergencies. And since only about 20 percent of Afghanistan's roads are paved, quick-reaction forces would slow to a crawl, especially in the mountains and in bad weather.

If protecting the population is what's needed to reverse recent Taliban successes, then the best way to do so is through local, small-scale policing where the Taliban has been most successful: in small towns and villages. But the brigades at the heart of the coming surge are insufficient in number and they're not organized, trained, or equipped to do this kind of policing. The mission of the surge force needs to be rethought, with a primary focus on achieving the ability to build effective local security forces."

The surge in Iraq centered troop increases and operations very heavily on Baghdad. The capital city was long the center of insurgent violence, and US commanders knew well that if they could pacify Baghdad, it would have massive effects throughout the country.

As Olsen points out, Afghanistan is pretty much the opposite of Iraq in terms of population distribution. It also has a population of almost 33 million, compared to Iraq's 29 million. Therefore, the US military must find a way to protect a larger, much more dispersed population, with a fraction of the funding and manpower that was available in Iraq even before the surge.

Faced with such an ominous challenge, what does Olsen suggest?

"What has not been tried (because it has been judged too painstaking) is a systematic effort to address problems in the Pashtun areas on a village-by-village, tribe-by-tribe basis. The tools of such an approach are readily available. They include precisely planned and executed military operations to attack extremist networks without killing innocent civilians, microloans, and microgrants that go directly to meet the needs of local markets and small enterprises (which could avoid the corruption that besets the national governments), and reconciliation agreements that target the interests of small groups and recognize the pitfalls associated with applying broad labels ("Taliban," "militant," "drug cartel," and the like)."

This is in line with a recently-announced change in tactics, which will shift development efforts, discussion, and negotiation away from the national level and toward more local institutions. This is partly a response to the rampant corruption in Kabul, and partly a recognition that historically political power in Afghanistan has been decentralized to a large degree.

The approach presented by Olsen is essentially classic counterinsurgency warfare. The main efforts are concentrated on providing protection for the local population, building trust, and providing basic needs for civilians. These efforts are supported by "offensive" actions -- described by Olsen as "...precisely planned and executed military operations to attack extremist networks without killing innocent civilians." These operations apply pressure to the insurgency and attempt to seize the initiative by forcing insurgents into a defensive posture.

Relating this to the previously-mentioned debate between counterinsurgency (COIN) and counterterrorism (CT), the method proposed by Olsen is much more comprehensive than simple CT operations. In a conflict centered on CT strategies, the primary aim would be elimination of enemy soldiers, weapons, and support structures. Progress would likely be measured by the number of insurgents killed or a similar metric -- the infamous "body counts" of Vietnam and Iraq which were found to reveal virtually nothing about actual progress being made. Counterterrorism strips away most of the vital population-centric components of COIN, leaving only part of an effective strategy.

Thankfully it appears the Obama administration is leaning toward a more robust COIN model for Afghanistan. However, as General Olsen points out, there are more than a few unique challenges in Afghanistan not previously encountered by US forces. Just as important as troop levels and the correct choice of strategic approach will be the adaptability of US forces on the ground as they are continually presented with the new and unexpected.

h/t to Kings of War

Thursday, March 26, 2009

Afghanistan Update

I want to take a moment to update and clarify some points from my last post on Afghanistan. In that post, I talked about the ongoing debate in the White House whether counterterrorist (CT) or counterinsurgency (COIN) operations should form the basis of America's approach in Afghanistan.

First, I want to clarify that the Obama administration should not be against CT operations. CT operations play an important role within the wider framework of COIN. What is important is that CT operations outside of the context of a broader COIN strategy are likely to alienate the Afghan population and aid the creation of a stronger insurgent Taliban/al-Qaeda force.

Also, I want to make it clear that although COIN operations are very demanding in terms of resources, manpower, and time, these shortcomings must be compared not to an ideal situation but to the available alternatives. While CT operations would require less manpower and less resources, this comes at the expense of effectiveness. Also, the idea that CT is "faster" is misleading. As mentioned above, adopting a CT strategy would likely lead to a worsening security situation in Afghanistan.

Therefore, the alternative to an extended COIN campaign is not a fast, successful CT campaign, but rather a CT campaign that is very likely to fail. How long a CT campaign would take would depend on how long America decided to continue with its failed endeavor. Depending on domestic opinion, an unstable and violent Afghanistan could lead to fast withdrawal or even a longer commitment than COIN operations.

Lastly Americans should keep in mind that even after years of dedicated, well-funded COIN efforts there is no guarantee of victory. Unfortunately, the record of large, conventional armies against insurgencies throughout history is not good at all. The U.S. military's brightest counterinsurgency theorists and practitioners -- John Nagl, David Kilcullen, Andrew Exum, Robert Kaplan, and Thomas Ricks, among others -- have clearly and repeatedly said that there is still a good chance we will lose the war.

Pundits and politicians who know virtually nothing about the military challenges of the war are fond of pointing to Iraq as proof that the US can win counterinsurgency wars. Within the military establishment, things are not seen as being so clear. While the switch to COIN doctrine by Gen Petraeus in Iraq in 2007 is credited with improving the security situation, America also got very lucky. Moqtada al-Sadr, the most powerful Shiite militia leader, declared a unilateral ceasefire. Sunni militias decided they had had enough with destructive foreign terrorists, and became willing to work with the Americans. These opportunities were exploited by smart, resourceful military leaders, who deserve some credit. However, they must be recognized as lucky opportunities.

In order to prevail in Afghanistan, we will need to utilize the lessons learned over years of recent counterinsurgency in Iraq and Afghanistan. Just as important, we need to remember that the alternative to difficult COIN operations is not easy CT operations, but ineffective CT operations. With enough hard work and a little bit of luck, there is still a chance the story of Afghanistan will have a happy ending.

Wednesday, March 25, 2009

COIN or CT?

A new article in Slate by Fred Kaplan discusses a very important choice that will be made soon by the Obama administration. Before the NATO conference in Strasbourg, France taking place in a week, Obama and his top commanders must decide whether the war in Afghanistan will be conducted as a counterterrorist (CT) or counterinsurgency (COIN) conflict.

Although to most Americans these two approaches may sound alike, they are in fact very different. They reflect different priorities and objectives, and would have extremely different effects. CT operations emphasize direct "kinetic" (meaning combat) operations to kill or capture the enemy. On the other hand, COIN operations are all about winning the support of the population, in order to deny the enemy much-needed support among civilians. While active "terrorist hunting" still plays a role in COIN, it is conducted mostly to protect and win the support of the local population.

Look at Iraq, for example. For years, the American military concentrated on hunting down insurgent leaders, with most operations aimed at killing insurgents or destroying their bases and arms caches. This approach is a fair example of counter-terrorism. Of course, despite killing thousands of insurgents and achieving countless tactical victories, the insurgency continued to grow and become more deadly.

Then in 2007 there was a revolution of sorts, lead by General David Petraeus, with the goal of implementing counterinsurgency doctrine in Iraq. Petraeus authored a military manual on COIN, and started moving the troops out of large, isolated bases. Scattered among the Iraqi population in smaller bases, American forces were better able to protect the people and gain their trust. Combined with efforts to develop economic infrastructure and provide for the needs of the Iraqi people, this new COIN strategy turned the tide against the insurgents.

Now there are many in the Obama administration, led by Vice President Joe Biden, arguing that the same counterterrorist strategy which failed in Iraq should be implemented in Afghanistan. Biden argues that the primary goal of the US in Afghanistan is to destroy al Qaeda. Therefore, the military should concentrate on direct attacks against the insurgent forces that protect and associate with al Qaeda.

On the other side are those who seek to implement a counterinsurgency strategy. They argue that the only way to defeat the Taliban and secure Afghanistan against devolving back into a terrorist's paradise is to win over the Afghan population. They call for extensive development projects and a larger effort to protect Afghans from the Taliban. COIN proponents seek to take the general principles that proved effective in Iraq, and use them to conduct a smarter war in Afghanistan.

Counterinsurgency is not without its drawbacks. The more complex operations of COIN require more boots on the ground and more funding. COIN is also a slower process -- it could take a decade to achieve victory. Lastly, even the most vocal proponents of COIN say that it will be a difficult process. Victory is not assured, but could be achieved with sufficient dedication.

Despite these drawbacks, the Obama administration should resist the urge to go for the "quick and easy" option of the counterterrorism model. Experience shows that CT is largely ineffective against an insurgency with substantial local support. Simply killing more Taliban fighters won't work, since they are able to recruit members even faster. Even more importantly, most of the Taliban and al Qaeda's top-level leadership has fled across the border to Pakistan. Since the US cannot send troops into Pakistan without causing a massive international incident, CT operations could not touch these leaders.

COIN operations, on the other hand, would build up the Afghan population, making them stronger and more supportive of US efforts. Since Taliban and al Qaeda elements hiding in Pakistan cannot be directly attacked, the best option is to weaken their support and influence among Afghans through COIN.

In addition, the US is ultimately responsible for the fate of the people of Afghanistan. Even if CT operations managed to sufficiently cripple al Qaeda, without COIN there would be no foundation for building a stable nation. Ending the war after CT operations against al Qaeda would open the door to another Taliban conquest and a return to the 2001 status quo.

The Obama administration must disregard myopic political pressures and make the right choice for Afghanistan. If we cannot gain the support of the Afghan population and build a stable government capable of defending itself against the Taliban, our efforts since 2001 will have been for nothing. Fighting the war the right way in Afghanistan will not be easy, but we owe it to ourselves and the Afghan people to try our best.

Tuesday, March 24, 2009

Back to Afghanistan

The Obama administration is beginning to unveil some details of its new Afghanistan strategy, and US military leaders are for the most part pleased with the changes being made.

First announced in February, Obama plans to send 17,000 additional troops to Afghanistan this spring and summer to combat the Taliban insurgency. General David McKiernan, the top US commander in Afghanistan, requested in October of last year as many as four combat brigades, or about 30,000 additional troops. The Obama administration is signalling a new commitment to the war in Afghanistan by granting the request, which President Bush could not do due to deployments in Iraq.

The war in Afghanistan has long taken a back seat, in terms of funding and manpower, to the war in Iraq. Relative stability in Iraq and upcoming redeployment plans will free up manpower in a military establishment that has been stressed to the limit for years. Often called the "Forgotten War", Afghanistan suffered greatly from this lack of attention as the once-beaten insurgency staged a recent resurgence. In the words of counterinsurgency expert and Afghanistan veteran Craig Mullaney, "You get what you pay for, and we haven't paid for much over the past seven years."

Envoy Richard Holbrooke announced that US forces will discontinue efforts to stop opium production in Afghanistan. The failed counter-narcotics program cost $800 million since 2001 and, according to Holbrooke, "...is the most wasteful and ineffective program I have seen in 40 years." In addition to wasting much-needed funds, the program alienated countless Afghans when American troops destroyed the only source of income for many -- their poppy fields. As the program is discontinued, more funds will be used in developing alternative sources of income for struggling Afghan farmers.

The newfound commitment to Afghanistan by the US is causing some stress with NATO allies, who are reluctant to provide their own troop increases. US diplomats say that they expect their NATO allies to come through with more troops to show their dedication to achieving victory. Commentators are calling this a key moment and test for the 60-year-old alliance. Domestic pressures in many NATO countries limit their ability to contribute, and it appears the war will be substantially "re-Americanized" as Obama deploys more troops.

Two seemingly-contradictory positions on the war in Afghanistan were voiced in the past week. Echoing the sentiments of many US military officials, counterinsurgency experts, and observers, John Nagl said that the war in Afghanistan was not even halfway through. Those most familiar with the situation in Afghanistan agree that a long, hard fight lies ahead. American forces must not only launch attacks on Taliban forces, they must win over the Afghan population, support and improve the corrupt and incompetent national government, develop economic infrastructure, and mold a governing system that fits the unique social organization of the Afghan people.

In seeming contrast with this prediction was a statement by Barack Obama that the US must have an "exit strategy" in Afghanistan. "There's got to be a sense that this is not a perpetual drift," Obama said in an interview on 60 Minutes. Apparently Obama was referring to the need for concrete measures of progress and well-defined goals of US involvement. His choice of words, however, certainly contrasted with his recent decision to ramp up efforts in the troubled nation.

Lastly, there was the announcement by Richard Holbrooke that, "The heart of the problem for the West is in western Pakistan." It is well-known among US forces in the region and experts that the future of Afghanistan will be primarily determined across the border in Pakistan. It is in Pakistan's northwestern territories, where the Pakistani government holds little power, that the Taliban recruits, trains, arms, and organizes their forces.

For years, the CIA has launched unmanned aerial attacks on Taliban positions in Pakistan -- a practice continued and intensified by the Obama administration. However, relations with Pakistan make any cross-border operations by US troops impossible. America has had little choice but to hope the Pakistani government would control the Taliban, but the situation has gotten substantially worse since the loss of Pervez Musharraf as President of Pakistan.

Taliban attacks on American logistical lines in Pakistan increased markedly over the past year. Even more troubling, the overwhelmed Pakistani government recently conceded governing authority in the western Swat region (which borders Afghanistan) to the Taliban. With the Taliban in complete control of this border territory, attacks in Afghanistan can only increase.

Numerous experts on the war in Afghanistan predict that the war will be won or lost in Pakistan. Any US operations on Pakistani territory, however, risk causing a diplomatic crisis with the fragile, nuclear-armed nation. Figuring out how to destroy a powerful insurgency protected by an international border will be the greatest challenge of the war.

Monday, March 23, 2009

Digging Deep

A new article in Commentary Magazine by John Steele Gordon points out an inherent contradiction in President Obama's economic plans. Obama partially justified the multi-trillion-dollar deficits created by his stimulus program and multiple corporate bailouts with the claim that economic growth following the recession will provide increased tax revenue to offset the deficits. To this effect, his economic forecasts assume economic growth as soon as 2011 to be more than 4 percent yearly.

Gordon points out the problem with such predictions: "Many of the policies Obama and his team are pursuing, cap-and-trade being the most obvious, are likely to interfere with growth in exactly the sectors in which the United States will need it."

Obama plans for a massive increase in the size and power of government to address global warming, to create a national healthcare system, and to expand classic welfare programs. Add to this the existing problem of funding Social Security and the costly wars in Iraq and Afghanistan, and you have makings of a real crisis.

The problems presented by such a massive increase in the size of government are twofold. First, these programs must be funded with taxes, which automatically makes a large fraction of the American GDP unavailable for fueling economic investment and growth. Second, these regulations and taxes increase the costs of doing business in many vital sectors, significantly slowing growth.

As Gordon observes regarding the planned system to reduce carbon dioxide emissions, "...cap-and-trade is, inescapably, a tax on virtually all economic activity, as fossil fuels are an input in nearly all economic outputs. Even a lawyer, after all, has to use electricity to have the lights on in his office and power his computer. And electricity is mostly generated by fossil fuels, especially coal, the biggest emitter of carbon dioxide."

Larger government will unavoidably drag down economic growth. This economic fact is widely recognized by those on the left and right. The political question has always been whether the programs being instituted are worth the costs, and the Democrats in control of Congress seem to think that national health care, global warming legislation, and other programs are worth the trillions they would cost.

However, the Obama administration is increasing the size of government so greatly and so quickly, we may find ourselves incapable of paying off the deficits we are creating. We already face multi-trillion-dollar deficits for more than a decade, and the foreign creditors who have kept our economy afloat are showing signs of nervousness.

Obama talks a great deal about fiscal responsibility, yet his unprecedented spending is creating a situation that could virtually bankrupt the United States. Hysteria over the financial crisis has the Federal Reserve printing trillions of dollars, driving inflation and weakening the dollar on international markets. As pointed out by Gordon, these programs are not only creating massive deficits but also stifling economic growth, making those deficits harder to pay off.

The only way to save the United States from an unprecedented crisis -- ushered in by crushing debts, rampant inflation and a stagnant economy -- is to immediately and drastically cut government spending and balance the budget. The Obama administration is frantically trying to spend their way out of the recession. In reality, they are digging a hole which the American people will be trying to escape for generations.

Tuesday, March 17, 2009

Time to End the Failed War

Mexico is in the midst of a violent internal war which has claimed thousands of lives. A million American citizens are locked in jail every year for committing crimes that harmed no one. Civil liberties are under constant assault by increasingly-militarized police forces. Urban gang violence tears at our social fabric and destroys countless lives. What is the connection between these tragic, disparate facts? The War on Drugs, a policy so destructive to American society that estimating its true costs is nearly impossible.

When Richard Nixon announced the beginning of the War on Drugs in 1969, he could not have predicted that as a result of his program, the United States would eventually incarcerate a larger proportion of its population than any other nation on earth. When Congress penned the first drug prohibition laws, they were unaware that they were creating a multi-billion dollar black market that would hugely empower criminals and breed violence.

Those who started this War meant only to prevent addiction and abuse of the substances they viewed as dangerous to society. Unfortunately, the actual results of the War were much more far-reaching and far less benign.

Those who started the War greatly misunderstood the effects of most drugs, the nature of addiction, and the economic incentives they were creating. Marijuana was famously said to produce a state of violent psychosis which threatened the safety of respectable citizens. It was thought that addiction, a moral failing, would disappear if only the addict's favored drug was legally made unavailable. Most tragically, the War's instigators ignored the lessons of alcohol prohibition, which had greatly empowered the Mafia, and thought that they could overpower the economic incentives to supply drugs.

Modern urban gangs as we know them are entirely the product of the War on Drugs. Virtually every gang in the United States -- from the Bloods and Crips to the Hell's Angels -- is primarily in the business of drugs. Without the black market in drugs, the vast majority of gangs would go totally out of business, and those who survived would lose their primary source of income and power.

With even the most basic understanding of economics, it is easy to see that it is fundamentally impossible to eradicate the black market for drugs. Criminalization drastically increases the cost of drugs, and therefore the profits of drug dealing. As long as there are people willing to break the law to make large profits, the drug business will thrive. Since these profits are accompanied by great risk, and because drug transactions must necessarily take place outside the protection of the law, violent and criminally-inclined "entrepreneurs" naturally take over.

The common perception that drug dealers are violent criminals, while technically correct, is thus seen as somewhat backwards. In reality, illegal drugs do not make people violent. Violent people make (and sell) illegal drugs, simply because they are illegal. Similarly, drug users are driven to prostitution, theft, and other criminal behaviors by the inflated price of illegal drugs, not by the drugs themselves.

Police tout massive seizures of drugs as evidence that they are making progress in the War. In reality, those seizures have little effect on the availability of drugs. When they do have an effect, it is only to increase the price of drugs, which increases the incentive for dealers to supply more. For every drug dealer that is arrested, there are two others waiting anxiously for their chance to profit from the drug trade.

Ironically, the more police do to keep drugs off the streets, the more profitable the trade becomes and the greater the incentives. The result is a system in which police crackdowns, no matter how intense, are incapable of causing substantial harm to the drug trade as a whole. The evidence of this is clear -- after decades of police efforts and billions of dollars in funding, drugs are cheaper, easier to obtain, and stronger than ever before.

What the War on Drugs has achieved is a steady violation of our freedoms, as police forces come to view everyone as a potential criminal. Whereas police once primarily protected Americans from violent criminals, they now hunt down nonviolent, productive citizens whose only crime is eating, drinking, or smoking a prohibited substance in the privacy of their own home.

Right now, the most troubling unintended consequence of the War on Drugs is the plague of violence in Mexico. Empowered and enriched by the profits of the drug trade, massive Mexican cartels are fighting each other and the Mexican government in an all-out war. Amazingly, the cartels' soldiers, armed with military-grade weapons and numbering over 100,000, pose a serious threat to the existence of the Mexican government. That is to say, the criminalization of drugs has created a black market so massive and profitable that these drug suppliers may be able to defeat a national government.

The conflict in Mexico has predictably produced from Washington only calls to intensify the War on Drugs. Politicians point to the violence as evidence of the great evils of the drugs that they have criminalized. Of course, there are no tequila cartels threatening the Mexican government, nor are there cigarette suppliers storming police stations with rocket launchers. It is not the drugs that cause the violence, but the criminal black market created by prohibition.

If the War on Drugs was finally ended the benefits to society would be overwhelming. The entire black market in drugs that breeds violence and enriches criminals would disappear. From America's cities to Mexico and beyond, gangs would lose power and wealth. With no more drug-funded gangs and shady drug transactions, murder and assault rates would go down. Cheaper, safer drugs would mean less prostitution, less disease, and less theft.

Nonviolent drug offenders would no longer fill our jails, and the billions of dollars spent every year on drug enforcement could be put to good use elsewhere. The militarization of our police forces would become unnecessary, and our freedoms would be largely restored. Drug production could be regulated for safety and even taxed. Tax revenue from drugs could pay for rehabilitation and addiction treatment programs, drug education programs for youth, and more.

As the recession deepens and unemployment increases, crime will likely increase in America's cities. The epidemics of drug-related crime and gang violence seen in the 1970s and '80s could even reappear. We have a chance now to prevent much of this violence, to deal a serious blow to gangs and violent criminals, and to create a freer and safer society. The War on Drugs is a complete failure. It has created far more problems than it has solved, and hurt millions of people. It is time for us to let go of the silly notion that this War is protecting anyone, and learn from our mistakes. It is time to end the War.

Wednesday, March 04, 2009

Excusing Irresponsibility

Liberal writer Matthew Yglesias recently wondered aloud on his blog who is really responsible for the wave of mortgage defaults sweeping the nation. His conclusion? Not those who took out the mortgages.

Yglesias argues that of the two parties involved in a mortgage agreement, one is typically a "teacher or a blogger or an electrician or a lawyer or a nurse..." and the other is "a guy who, for a living, as a professional, works in the 'deciding on what terms to offer people mortgages' business". Yglesias' argument is that the lender is the expert, and should be held responsible to a much greater degree than the borrower, who may know very little or nothing about mortgages.

He decides that only a "tiny fraction" of the blame can be assigned to the borrower, since the borrower trusted the financial experts (both the lender and the government regulators who oversee the lender). In a nutshell, Yglesias says that the average borrower cannot be expected to know whether or not they are making a wise financial decision, and therefore they cannot be held responsible when their decision turns out to be bad.

There are some big problems with this kind of thinking. The first is that, contrary to what Yglesias says, there were countless people who, given the same publicly-available information about housing markets, chose to pay a higher, fixed rate rather than trying to get a lower rate and gamble on the future with an adjustable-rate mortgage (ARM). This suggests not only that an eventual drop in housing prices was somewhat forseeable, it also shows that many, many average borrowers are perfectly capable of managing risk in a responsible way.

Many commentators called the behavior of lenders during the housing bubble "greedy". Insofar as the lenders made unwise decisions out of a desire to make money, ignoring commonsense principles of finance, this could be a fair labeling. But why is it that Yglesias does not see the behavior of the borrowers, who were securing very low ARM rates in an attempt to maximize their savings, as greedy? The lender's greed in giving out questionable loans and the borrower's greed in exploiting suspiciously-low rates are merely two sides of the same coin.

Apparently Yglesias is of the opinion that the borrowers were clueless rather than greedy, and knew no better than to take the terms offered them by unscrupulous lenders. This brings us to another problem with Yglesias' thinking.

It is impossible to differentiate between those who might have been somehow duped into taking untenable loans, and those who knowingly took the loans on risky terms, hoping to cash in on the housing bubble. Since we cannot know this, Yglesias is basically proposing that everyone must be treated like children. They did not know what they were doing, he says. They are just victims.

Are we really to believe that these borrowers, who were in many cases building large homes obviously far beyond their means, were all (or even mostly) unwittingly manipulated by lenders? Even if the lenders were somewhat unscrupulous, is the borrower not obliged to actually understand the binding agreement they are signing?

According to Yglesias, American citizens have no such responsibility. If a lender puts a piece of paper in front of you and tells you it's a good deal, you cannot be blamed for signing it or held responsible for any problems that arise from signing it.

If we make this leap of logic and absolve these adults of their contractual obligations -- on the premise that they were basically too inept and irresponsible to enter into financial agreements in the first place -- we are undermining the most basic principles of responsibility upon which our society is based. It is hard to think of any greater moral hazard than this wholesale nullification of responsibility.

It is certainly regrettable that so many homes are facing foreclosure. However, is it really so horrible that these borrowers must give up the homes that they could never afford in the first place? Are we compelled to protect them from living in a smaller home or renting like the millions of Americans who acted responsibly? How does it help our suffering economy when we reward those who contributed to its collapse through their irresponsible actions?

There is no reason that these borrowers should be arbitrarily declared immune from the basic financial realities that face us all. The kind of infantilizing proposed by Yglesias would do little to help our nation's economy, while sending all the wrong messages at a time when financial responsibility is more important than ever. This kind of clumsy attempt by the government to shield people from responsibility for their mistakes does far more harm than good.