Gregg Easterbrook

Unemployment is the real price of war

Jun 22, 2011 20:29 UTC

The cost of ongoing U.S. wars in Afghanistan, Iraq and Libya is up to at least $1.2 trillion. What would the economic recovery look like if that money hadn’t been spent?

The GDP was about $10.1 trillion when U.S. forces invaded Afghanistan, and is $14.7 trillion now, an annualized growth rate at around 2 percent. That the U.S. economy still was able to grow despite war cost — every penny of it borrowed — other runaway borrowing, and the 2008 revelation of systemic perfidy on Wall Street, at the big banks and at Fannie Mae is testimony to America’s vibrancy.

But imagine if $1.2 trillion had been added to the economy, rather than spent on war. Of course lower military spending does not translate one-for-one into increased economic growth — the two aren’t directly correlated. But they are related, and as Harvard economist Martin Feldstein said last week, “each dollar of extra deficit adds much less than a dollar to GDP.”

So imagine that $1.2 trillion had not been spent smashing things, including America’s own military hardware, in Iraq. Afghanistan and now Libya. War, after all, is about killing people and destroying resources. Economic growth is about empowering people and creating value.

Add war costs back into  the economy and the U.S. GDP would be around $16 trillion today, an annualized growth rate of roughly 3 percent for the last decade. At that level of growth, unemployment would be lower, deficits would be lower and the national mood brighter.

Make Puerto Rico a state: it’s good for business

Jun 14, 2011 18:54 UTC

As Barack Obama makes the first presidential visit to Puerto Rico in half a century, let’s cut to the chase: this island will be the 51st state, and the sooner the better.

Fifty is a nice round number for states, but prepare to kiss it goodbye. Puerto Rico will be 51st, and not necessarily the last. Alberta and British Columbia may join the United States someday; U.S. states named Sonora and Baja California are not out of the question. There will be more stars on the flag.

The United States has always been about the open door: arrivals make the country stronger. The boundaries of our great nation have always been in flux: until 1912, it was far from clear that Arizona belonged.

Why can’t politicians admit they’re wrong?

Jun 7, 2011 13:36 UTC

Rep. Andrew Weiner, after elaborately denying posting a controversial picture on Twitter — Hollywood beauties are described as posing “semi-nude,” Weiner posed semi-lewd — just admitted that he did. Sarah Palin refuses to admit she was wrong about Paul Revere’s Midnight Ride — though she claimed Revere’s purpose was to warn “the British”. John Edwards, now facing criminal charges, is in jeopardy of going to jail owing to a chain of events that began when he refused to admit having an affair — after boasting of being a family-values vice-presidential candidate. Presidential contender Newt Gingrich first refused to admit a dumb remark about Medicare reform, then claimed quotation of his own remark is “a falsehood.” Gov. Chris Christie of New Jersey at first refused to admit using a state helicopter for personal travel — though it was on film! — then denounced those who complained.

These are merely the last week’s examples of a troubling tendency among public figures — refusal to admit being wrong. Just as lying about what you did may be worse than what you did, refusing to admit an error may be worse than the error itself.

All human beings occasionally are wrong — trust me, I’ve had plenty of experience! Honest admission of error makes a person upright and sympathetic. Refusing to admit error, by contrast, suggests deviousness or even megalomania. The sort of person who huffs and puffs and refuses to admit a mistake does not belong in a leadership position.

The Post Office — return to sender

Jun 1, 2011 18:01 UTC

Suppose a company that was losing customers to other firms responded by increasing prices, cutting service, granting raises to workers and overpaying management. If the company then demanded a lavish government bailout, the public would laugh.

The company I have just described is the United States Postal Service.

A USPS bailout is not the solution. Blowing up the Post Office — its monopoly, its customer-be-damned attitude, its system of lifetime job guarantees regardless of performance — is the solution. After the dust from the explosion settles, the mails will continue to exist, in a leaner, sustainable and more customer-conscious form.

The USPS just reported a $2.2 billion first-quarter loss, despite having a federal monopoly that exempts the Post Office from competition for its core business. Exemption from competition is the core of the USPS problem, allowing the agency to drag its heels against the modern age, while clinging to bad business practices.

What’s causing the tornado tsunami

May 24, 2011 16:54 UTC

“Tornadoes are currently on a frightening upswing.” That could have been written yesterday — but was written 12 years ago, by your columnist, in the November 8, 1999 issue of The New Republic.

The onslaught of tornadoes is not some sudden, unexpected bolt out of the blue. I wrote about tornadoes a dozen years ago because 1998 and 1999 were terrible years for tornadoes. Now three of the last 12 years have been terrible for tornadoes, and the 1950-2010 trend isn’t so great either.

This spring’s tornado activity has been awful. At least 116 people died in Joplin, Missouri, on Sunday during an unusually strong and large tornado. A portion of Tuscaloosa, Alabama was destroyed by a tornado last month. Many tornadoes hit the Ozarks region in April. There were 875 confirmed tornadoes in April, triple the previous April high of 267, in 1974. So far 481 Americans have been killed by tornadoes this spring.

Why we should focus on methane; not carbon dioxide

May 19, 2011 17:44 UTC

Gasoline is above $4 a gallon, a price that makes Americans think the End of Days is approaching. President Barack Obama wants the oil industry to give up a mere $2 billion per year in tax favors, and Big Oil CEOs just told Congress this is out of the question. (Watch CEOs of some of the world’s richest companies cry poor-mouth here).

Huge amounts of shale gas are being discovered in the United States, but does extracting the gas pollute groundwater? In a recent speech, Obama was upfront about all U.S. plans for “energy independence” being just political hot air. And for the zillionth consecutive year, Congress is supposed to enact a comprehensive national energy policy, but instead appears focused on horse-trading subsidies and bailouts.

Is there anything being missed in the endless energy debate?

Yes — methane emissions. Methane is a much worse greenhouse gas than carbon dioxide. Methane could be regulated without economic risk, reducing the artificial greenhouse effect and buying society a decade or two of extra time to research ways to control other greenhouse gases.

With bin Laden dead, why doesn’t the U.S. leave Afghanistan?

May 11, 2011 19:28 UTC

In 2003, the United States invaded Iraq citing two justifications: to depose Saddam Hussein and to destroy Iraq’s banned weapons program. Within a year, Hussein and his accomplices were imprisoned, and it had been discovered there was no Iraqi banned weapons program. Having achieved its goals, why didn’t the United States leave? Seven years later, this question haunts the U.S. occupation of Iraq.

In 2001, the United States invaded Afghanistan, citing two justifications: to find Osama bin Laden, and break up al Qaeda. Bin Laden is now dead, and al Qaeda broken.

So why doesn’t the United States leave?

By autumn, American forces will have spent a full decade in Afghanistan — conducting patrols, bombing the heinous, bombing the innocent. The United States has roughly 100,000 soldiers and air crew in Afghanistan, almost as many as the peak force in Iraq. The U.S. presence in Afghanistan constrains the Taliban, and the Taliban are an awful group. But the Taliban are a central Asian problem afflicting Afghanistan and Pakistan — their existence does not in any way threaten the United States’ national interest.

Discussing bin Laden on the BBC

May 10, 2011 17:27 UTC

Recently, I was a guest on BBC World Service, to discuss whether the killing of Osama bin Laden can be called “justice.” The BBC podcast is here. My Reuters column on the subject is here.

Why the U.S. had a right to kill Osama bin Laden

May 2, 2011 16:33 UTC

Should the United States have invaded Iraq? Should the United States be bombing Libya? These are troubling questions. But there is no question the United States had a right to kill Osama bin Laden — and no doubt his death is good news, including for the world’s Muslims, most of whom are law-abiding and peace-loving.

Bin Laden led an organization that attacked civilians in the United States and several other nations. Under international law, under all ethical and most religious reasoning, the United States had a clear right of self-defense regarding bin Laden and al Qaeda. Pakistani national sovereignty may have been violated, which is an issue for Washington and Islamabad to work out. But the killing itself was self-defense. No serious person — and no school of thought — should object.

Some time may pass before important details are known. From initial reports, these thoughts come to mind:

Bernanke raises the curtain on the Federal Reserve

Apr 27, 2011 19:40 UTC

Only the Pope guest-hosting Saturday Night Live could top, in public-relations terms, what just happened in Washington — Fed Chairman Ben Bernanke gave a press conference, the first time a Fed chair has stood before reporters to take questions. And maybe Benedict XVI should film an Internet intro to St. Peter’s, since Bernanke just posted an intro to the Vatican of money.

And what a press conference! It began exactly on time. The mood was sedate, the questions softly spoken and polite. Bernanke didn’t take the bait when a reporter asked what he thought of “many economists” calling Fed policy ineffective; there was no snarky follow-up. Recent presidents could only dream of presiding over such a respectful press conference.

Traditionally, Fed chairs have spoken in public only to read a prepared speech — often, cloaked in mumbo-jumbo — or to present congressional testimony. Fed chairmen’s appearances before congressional committees have tended to be dominated by representatives and senators who want to hold the floor, and the cameras’ attention, as they engage in long-winded self-flattery. Sharp, concise questions of the sort asked by reporters are rare in congressional hearings.