Tax Reform Time

Dan Shaviro, a tax law professor at NYU, has a useful analysis of the new tax reform proposals coming out of Bush's Tax Reform Commission. (See Kevin Drum for another summary.) I figured originally it was enough just to sneer at the proposal on account of it: a) being revenue-neutral, thus locking in the present budget deficits, and b) shifting the tax burden from wealth to work. Shaviro suggests it's not quite as bad as all that, and there are some decent ideas in there, but that these reforms are extremely unlikely to happen—especially the caps on deductions for employer-backed health insurance and interest on mortgages—and the Bush administration will probably just "bury this plan under the heaviest rock they can find." Fair enough.

Sam Rosenfeld and Matt Yglesias have a new TAP article arguing that the war in Iraq—or at least the "liberal hawk" idea that Iraq could be made a democracy at the barrel of a gun—was always doomed to fail, and it wasn't just that Bush utterly botched it. This debate seems somewhat odd, since this fact was plainly true from the start. The Iraq war was sold primarily as a means to stabilize the oil supply and avert a mushroom cloud in New York, not as a democracy-building project. Only a fool would have pretended that a goal very few people cared about could be neatly achieved. Sadly, there were a lot of fools in March 2003. But Rosenfeld/Yglesias' argument is that even if the war had been sold and fought exactly as the liberal hawks wanted—as a way to turn Iraq into a liberal democracy—it still would have failed.

Well, I agree. The United States has never shown much interest in democracy-building, it's never been much good at it, and as I noted earlier in the week, the "civilizing" adventures of empire have usually succeeded or failed based on the internal factors in the occupied country, rather than external planning. That was as true for the American South in 1865 as it was for Kosovo in 1999. And the mere existence of a profit-seeking military-industrial complex made the looting of the Iraqi treasury a foregone conclusion. There's no reason to think George Packer or Peter Beinart could have "remade" Iraq better than Bush. But I think this part of the TAP piece sells liberal interventionism somewhat short:

Intervening requires us to take sides and to live with the empowerment of the side we took. Tensions between Kosovar and Serb, Muslim and Croat, Sunni and Shiite are not immutable hatreds, and it's hardly the case that such conflicts can never be resolved. But they cannot be resolved by us. Outside parties can succeed in smoothing the path for agreement, halting an ongoing genocide, or preventing an imminent one by securing autonomy for a given area. But only the actual parties to a conflict can bring it to an end. No simple application of more outside force can make conflicting parties agree in any meaningful way or conjure up social forces of liberalism, compromise, and tolerance where they don't exist or are too weak to prevail.
That's obviously true of the United States military, which has classically been good primarily at smashing things, although our twenty-year-old soldiers have adapted to "mission creep" unbelievably well in Iraq. But Donald Rumsfeld now wants to make the military even better at smashing things, as opposed to people like Thomas Barnett who want to see a more fully developed "SysAdmin" side—and regardless of what you want to call it, the "Jacksonian tradition" in American foreign policy has never had much interest in anything more than overwhelming bloodletting in the defense of the national interest. We're a nation ruled by plutocrats and powered by rough-hewn nationalists; idealistic projects abroad just aren't in the cards, except in rare circumstances.

But the United Nations complicates the tale somewhat, since their peacekeeping forces actually have succeeded in reconciling a large number of post-conflict nations. Post-WWII UN operations in Congo, and post-Cold War peacekeeping forces in Namibia, El Salvador, Mozambique, Eastern Slavonia, Sierra Leone, and East Timor should all count as successes—the UN disarmed the parties, demobilized militias, held relatively free and fair elections, and put the countries on a path towards sustained civil peace. So in one sense, outside forces can "make conflicting parties agree in [a] meaningful way," and if they didn't conjure up, as TAP puts it, "social forces of liberalism, compromise, and tolerance," they at least pointed the way down that path. Those countries, save for the Congo, are all peaceful democracies today. We know it can work because it's been done.

On the other hand, even the UN can't seem to stop a country from disintegrating, but it's hard to tell how much of this failure comes from the inherent difficulty of the task and how much from the implementation. The original UN peacekeeping mission in Somalia obviously flopped, but it was also severely undermanned. Same with the initial UN force in Bosnia. (Could a more robust operation—say, 20,000 more troops and American commanders—have averted many of the Balkan crises later in the 1990s? Maybe.) So I don't think I'm quite as ready to take the same "it's impossible" stand, although a good deal of modesty and skepticism is absolutely crucial here. I think the United States is inherently unable to do nation-building right now, yes. But that says as much about the United States as it does about the inherent impossibility in peacekeeping and nation-building, and it's worth, I think, trying to disentangle the two.

It is bad enough that there is footage of American soldiers burning the bodies of members of the Taliban. Such an act is not only offensive to Muslims, but is a violation of the Geneva Convention.

But to literally add insult to injury, the soldiers also revealed both their misogyny and their homophobia in the insults they hurled at surviving fighters:

"You attack and run away like women." Americans are reported to have said. They are also reported to have said: "You are too scared to retrieve their bodies. This just proves you are the lady boys we always believed you to be."

If anyone even bothers to care about the underlying offensiveness of these remarks--and I doubt anyone in authority will--the spin is sure to be something like "We were just reflecting their cultural beliefs."

That may be true, but I'm afraid the remarks also reflect the cultural beliefs of the U.S. military. Some of the soldiers risking their lives in Afghanistan were women, and some were gay. In insulting the perceived cowardice of the Taliban, for whatever reason, the soldiers in the video were also insulting those who fought along beside them and supported them.

Over and over, women in the military are sexually harrassed and assaulted by their peers and by officers, and then punished when they try to report the assaults. In 2003, 28% of female veterans reported being victims of sexual assault during their careers, and that number does not take sexual harrassment into account. The Tailhook incident should have taught the military something, but it didn't. When then-Minnesota Governor Jesse Ventura described the Tailhook scandal as insignificant, he was reflecting the views of the U.S. military.

Gays in the military haven't fared any better. Because of the inane "Don't ask, don't tell" policy, if a gay soldier reports sexual harrassment or assault, s/he can face expulsion from the mllitary. Gay soldiers, therefore, have no recourse.

It is hard enough to export democracy when the administration is tearing it down at home. It doesn't help when the U.S. military also exports bigotry toward women and gays.

A couple of days ago, the Los Angeles Times ran a very concise op-ed by Norm Stamper, former chief of police in Seattle, on the mounting costs of the drug war:

It's not a stretch to conclude that our draconian approach to drug use is the most injurious domestic policy since slavery. Want to cut back on prison overcrowding and save a bundle on the construction of new facilities? Open the doors, let the nonviolent drug offenders go. The huge increases in federal and state prison populations during the 1980s and '90s (from 139 per 100,000 residents in 1980 to 482 per 100,000 in 2003) were mainly for drug convictions. In 1980, 580,900 Americans were arrested on drug charges. By 2003, that figure had ballooned to 1,678,200. We're making more arrests for drug offenses than for murder, manslaughter, forcible rape and aggravated assault combined. Feel safer?

I've witnessed the devastating effects of open-air drug markets in residential neighborhoods: children recruited as runners, mules and lookouts; drug dealers and innocent citizens shot dead in firefights between rival traffickers bent on protecting or expanding their markets; dedicated narcotics officers tortured and killed in the line of duty; prisons filled with nonviolent drug offenders; and drug-related foreign policies that foster political instability, wreak health and environmental disasters, and make life even tougher for indigenous subsistence farmers in places such as Latin America and Afghanistan. All because we like our drugs—and can't have them without breaking the law.Nothing much to add there. His solution? "Regulated legalization":

1) Permit private companies to compete for licenses to cultivate, harvest, manufacture, package and peddle drugs.

2) Create a new federal regulatory agency (with no apologies to libertarians or paleo-conservatives).

3) Set and enforce standards of sanitation, potency and purity.

4) Ban advertising.

5) Impose (with congressional approval) taxes, fees and fines to be used for drug-abuse prevention and treatment and to cover the costs of administering the new regulatory agency.

6) Police the industry much as alcoholic beverage control agencies keep a watch on bars and liquor stores at the state level. Such reforms would in no way excuse drug users who commit crimes: driving while impaired, providing drugs to minors, stealing an iPod or a Lexus, assaulting one's spouse, abusing one's child. The message is simple. Get loaded, commit a crime, do the time.It's too sensible a proposal to happen anytime soon—not in an age where the president takes a strong stand against medicinal marijuana—but worth bringing up every now and again.

As the Hill reports today, Republicans in Congress are getting ready to reduce the deficit by making "tough choices" and hacking at programs for the politically powerless. (This despite the fact that discretionary spending cuts won't make a dent in the deficit; repealing the Bush tax cuts is, needless to say, off the table.) On the other hand, as Sam Rosenfeld notes, the outcry over Katrina may shame them into restraint; already the Senate has dropped a plan to slash food stamps—which would, again, shave off a mere $500 million from an annual deficit that's exceeding $400 billion. It's like trimming a few blades of grass near the porch by hand when the yard is overrun by weeds, but no one seems to mind.

In all likelihood, the bulk of the cuts will come from Medicaid; a terrible idea considering that the health care program for the poor has been taking care of the ever-growing number of Americans losing their health insurance and sinking into poverty. The GOP is envisioning some $35 billion in cuts over the next five years, but the rather disgusting irony here, as a new study from the Center on Budget and Policy Priorities shows, is that it's very, very easy to achieve these savings from the government health care programs merely by trimming some of the excess payments made to the managed care companies that run Medicare. Most of this excess is the famous "waste" we hear so much about. Of course, since PPOs and HMOs have their own set of lobbyists, and tend to make large campaign contributions, while Medicaid recipients have... desultory popular outrage... on their side, the choice here isn't going to come as much of a surprise.

I don't even know what to say about this:

The chief Pentagon agency in charge of investigating and reporting fraud and waste in Defense Department spending in Iraq quietly pulled out of the war zone a year ago - leaving what experts say are gaps in the oversight of how more than $140 billion is being spent.

Apparently the Pentagon hasn't had an inspector general watching things in Iraq for over six months. Of course, the last inspector general, Joseph Schmitz—a self-described "conservative activist"—wasn't exactly known for his eagle eyes, spent most of his time defending Halliburton, arguing that the companies problems were "not out of line with the size and scope of their contracts." (Schmitz eventually resigned after becoming the focus of a congressional inquiry into whether he blocked two criminal investigations over the Pentagon's crooked air-tanker deal with Boeing; he now works for Blackwater USA, a private security contractor operating in Iraq.) In a sane world, Schmitz would have been replaced with someone who was able to do their job. Not, obviously, the world we live in.

UPDATE: More, from the Washington Post:

Stuart W. Bowen Jr., special inspector general for Iraq reconstruction, [told Congress that] administration promises to use $18 billion Congress allocated to rebuild water, electricity, health and oil networks to prewar levels or better are running into cold reality. "We are going to provide something less than that," he said....

The hearing came with uncertainty over who will be watching over future spending in Iraq. Bowen's office could disappear as soon as next year, though pending legislation would extend its life. Krongard said he has not yet received funding for 2006 to provide oversight in Iraq. And the Defense Department's acting inspector general, Thomas F. Gimble, revealed that his office does not have a single staff member in Iraq.

Time has an illuminating interview with "Abu Qaqa al-Tamimi," an Iraqi insurgent trainer, that among other things sheds light on why so many suicide bombers in the country have been foreign fighters rather than Iraqis:

Most of the more than 30 bombers he says have passed through his hands were foreigners, or "Arabs," to use al-Tamimi's blanket term for all non-Iraqi mujahedin. Although he says more and more Iraqis are volunteering for suicide operations, insurgent groups prefer to use the foreigners. "Iraqis are fighting for their country's future, so they have something to live for," he explains. He says foreign fighters "come a long way from their countries, spending a lot of money and with high hopes. They don't want to gradually earn their entry to paradise by participating in operations against the Americans. They want martyrdom immediately." That's a valued quality sought by a handler like al-Tamimi, says counterterrorism expert Hoffman: "It's one less thing for the handler to worry about--whether the guy is going to change his mind and bolt.
Makes sense. Meanwhile, al-Tamimi—a pseudonym, obviously—claims that he was radicalized after being tortured in Abu Ghraib by occupation forces; which could be true or not, though he does seem to have used prison time productively to become more religious and develop further terrorist contacts. (He was originally a member of Saddam's Republican Guard, although as with most Baathists joined up with radical Islamic networks in 2004.) Another point: as Doug Farah has noted, one would think that capturing people like al-Tamimi would probably be much more effective for purposes of counterinsurgency than worrying about all those "high-ranking lieutenants," since the trainers and former military men seem to have all the semi-irreplaceable skills. But then, the Republican Guard alone numbered some 175,000 before the war, and that doesn't include Mukhabarat (100,000) and Fedayeen Saddam (~40,000), so it's not like people like al-Tamimi are at all in short supply... Those numbers, by the way, come from John Robb, who has made a convincing case that the United States is fighting a much bigger insurgency than it has let on.

I don't know how recent this is, but Sameena Nazir of Freedom House has written a very thorough overview of the bleak state of women's rights in the Middle East and North Africa that's worth a look.

As one might expect, repressive laws are generally the biggest problem in the region; on this score, it looks like Morocco rates the most liberal country, especially after passing its new family code early last year, but laws usually aren't enough. As Nazir points out, "Most countries [have] guarantees of equal rights, [but] in no case are these guarantees effectively enforced by state authorities." And there are plenty of other ways in which laws can fall short of guaranteeing equality:

Many women suffer from a lack of awareness of their legal rights under the country's family law. For example, under Muslim family law, the marriage contract generally contains a section that allows each spouse to stipulate in writing his or her specific rights in the marriage. This feature gives women the theoretical ability to achieve equal rights within the marriage. In practice, however, this feature of the marriage contract is seldom utilized, either due to illiteracy or lack of familiarity with the available legal options or due to patriarchal social traditions under which it is the prerogative of the bride's male guardians to finalize the conditions of the marriage contract. Governments in most countries do not engage in public education campaigns on women's rights in the marriage.
Definitely worth reading the whole thing.

Dean Baker's post on why the U.S. government should strip Roche of its Tamiflu patent is all well and good—along with his rant on the evils of the pharmaceutical industry—but the real action's all in this old paper he wrote on alternatives to our current method of financing drug innovation. Why doesn't the patent system—which allows drug companies to sell their little pills for 300-400 percent of the marginal cost in order to recoup their "research" investment (or at least that's the line they have us swallow)—work very well? Well:

[T]here are very good reasons - well known to all economists -- for preferring that drugs be sold in a competitive market with the price approximating the marginal cost of production. The gap between price and marginal costs under the current system of patent supported research leads to large and rapidly growing distortions. This includes denying drugs to patients who could afford them if they were sold at their marginal cost, the distortions also include the tens of billions of dollars spent each year on promoting drugs.

Even more serious is the incentive that monopoly pricing provides firms to conceal or misrepresent research findings. Finally, a large gap between price and marginal cost will inevitably lead to the production of unauthorized versions of patent protected drugs. While these unauthorized versions make drugs available at a lower costs to patients, their quality cannot be ensured since illegal markets are unregulated.All very real problems, these, and one can note that this sort of protectionism matters much, much more than the various trade barriers people get agitated about. Now obviously we can't just junk the patent system; companies need some incentive to invest in research. But sure we can think of alternatives that work better. Baker lists a couple, including Dennis Kucinich's proposal to get rid of drug patents and steer about $25 billion in taxpayer money (about what Big Pharma claims to spend on research) to government-backed research organizations, similar to the current NIH (or the research universities of yore), and socialize drug research. More on that in a bit, but the point here is that any financing alternative will have to achieve four main things:

  1. provide incentives for pursuing "useful" research
  2. minimize the possibility that market distortions will create incentives to pursue less useful lines of research
  3. minimize the risk that political interference will direct research spending to less useful ends
  4. minimize the incentive to suppress research findings

Obviously it's tricky to decide what is and isn't "useful" research—who decides? the "market"? the government? the dying children lobby?—but the current patent system certainly does badly on the last three counts. Drug companies presently have greater financial incentives to cater their research towards balding, impotent, overweight suburban males rather than look into, say, innovative malaria treatments for the Third World. The patent system also gives drug companies incentives to pursue "me-too" drugs and reap the monetary rewards—see Marcia Angell on this—as well as to suppress any inconvenient research findings.

Now if the government decided to sponsor research directly, as Kucinich proposed, it could avoid many of these problems—2) and 4) especially—but, of course, there's the possibility that politicians could start mucking around with where the research dollars go. Think the reigning First Church of Dennis Hastert would approve one cent for developing new contraceptives? Me neither. And under Kucinich's plan, private research companies could use the legalized graft system in this country to win contracts unduly. On the other hand, to some extent this problem already exists—current research at the NIH is subject to political pressures, and since drug companies often depend to a large extent on government Medicare purchases to profit from their patents, innovation already depends on lobbying, to some extent.

So… What Is to Be Done? In my opinion, the pharmaceutical industry as it stands still does good work, and I don't think full-blown socialism is called for just yet. No, I much prefer creeping socialism. Right now most government research money goes towards basic research, rather than the development and testing of new drugs. Why not steer a couple billion this way, as a test to see if the government can do drug innovation on its own? Meanwhile, draconian regulation to crack down on some of the worst excesses of the current patent system: force drug companies to open its books; regulate advertising; free the FDA from Big Pharma's tentacles; make the approval of new drugs contingent on improvements over existing drugs (right now, new drugs merely need to be better than placebos to be approved). We can be reasonable here.

Good News for Peace

The newly published Human Security Report describes an under-celebrated fact: namely, the decline of war, human rights abuses, and genocide in the last decade. A few highlights from the Report's findings:

- The number of armed conflicts has declined by more than 40% since 1992. The deadliest conflicts (those with 1000 or more battle-deaths) dropped even more dramatically––by 80%.

- Wars have become dramatically less deadly over the past five decades. The average number of people reported killed per conflict per year in 1950 was 38,000; in 2002 it was just 600––a decline of 98%.

- The number of international crises, often harbingers of war, fell by more than 70% between 1981 and 2001.

- The number of military coups and attempted coups has declined by some 60% since 1963. In 1963, there were 25 coups or attempted coups; in 2004, there were 10. All failed.

- The biggest death tolls do not come from the actual fighting, however, but from war-exacerbated disease and malnutrition. These 'indirect' deaths can account for as much as 90% of the total war-related death toll. Currently there are insufficient data to make even rough estimations of global or regional 'indirect' death toll trends.

The Report gives credit to the United Nations' efforts, citing a RAND study that shows that two-thirds of UN peace-building missions are successful in bringing armed conflict to a negotiated end. But, to return to gloomy realism, as Bruce W. Jentleson notes on TPM Cafe, all this good news is "what makes the retreat at last month's UN 2005 World Summit on humanitarian intervention and related peace operations all the more discouraging."