Gregg Easterbrook

Last night President Barack Obama announced “the end of our combat mission in Iraq.” This is welcome news — if years late. Yet in an address to the nation that ranged as far afield as energy policy and “the limitless possibilities of our time,” the president never got around to the essential question of this costly bloodbath:

Why did the United States spend seven years fighting in Iraq?

By the estimate of the British correspondent John Burns and New York Times London bureau chief, who was living in Baghdad when the invasion began and remained there until 2008, the war killed 4,500 Americans and wounded 35,000 of them. It also caused “tens of thousands” of Iraqi civilian deaths; cost $750 billion, nearly enough to wipe out this year’s federal deficit; and created “the anti-Americanism that would become commonplace around the world.”

That last is all too easy to overlook. Before the 2003 invasion of Iraq, the world’s sympathy was with the United States. Everyone, including almost every Muslim, knew the 9-11 attack was heinous. Almost all nations, including nearly all Islamic nations, supported America’s counterattack in Afghanistan, which was clearly justified as self-defense.
Then we bombed and invaded Iraq, a country that had nothing to do with the 9-11 monsters, killing at least 10 times as many innocent civilians as were killed here on September 11. We took huge numbers of Iraqis prisoner, and tortured or humiliated them.

We blasted to the ground cities such as Fallujah, destroying the homes of innocents while using antipersonnel weapons, such as white phosphorous shells, which are designed to cause intense suffering before death.

We installed a puppet government and began to kill those who opposed it. Much of the world was disgusted, with reason. We practically begged the moderate Muslims of the world to turn against us.

The fifth anniversary of Hurricane Katrina, coupled with the mild hurricane Danielle tracking toward Bermuda, turns thoughts toward cyclones.

In May, before the current Atlantic hurricane season began, forecasts were for Armageddon. This year’s hurricane season could be “very active” (Jane Lubchenco, head of the National Oceanic and Atmospheric Administration) or “very very active” (CNN) or “a hell of a year” with “quite high” numbers of intense storms (William Gray, head of the hurricane prediction center at Colorado State University).

What has actually happened so far? A below-average season of two hurricanes, neither one intense.

An Asian nation with a roaring economy will eclipse the United States … America has entered a cycle of decline, while the sun is rising in the East … soon all our products will be made overseas and America will falter … doom is at hand.

The above paragraph does not describe Monday’s news about the expansion of the Chinese economy — this is what opinion-makers were saying about Japan in the 1980s. And how’d that work out for you, Tokyo?

“Experts,” the New York Times intoned on Monday, are impressed by “China’s clout” and believe “China will pass the U.S. as the world’s biggest economy as early as 2030.” If experts think this, then it’s certain not to happen.

POINTS THAT DIDN’T QUITE MAKE THE MAIN COLUMN:

1. Rejecting the idea of Japan-as-number-one

My friend James Fallows’ 1989 book “More Like Us” was prescient in rejecting the idea of Japan-as-number-one. Jim wrote the book book while living in Japan. Some of the reaction to his book was critical scoffs — doesn’t he know Japan is invincible! The content of this book has done well on the test of time. Fallows’ thesis was that Americans would never wish they were like the Japanese, whereas the Japanese someday would wish they were “more like us.” So far, that’s happened.

Yet even this paean to the United States spirit had as its subtitle “Making America Great Again.” Today, commentators speak wistfully of the 1980s as the good old days when America was great, but at the time, publishers thought America was terrible. In 20 years, it will be common for politicians and pundits to refer, wistfully, to 2010 as the time when everything in America was fine.

2. Signs of global warming

Many commentators are asking whether 100-degree Fahrenheit temperatures in Moscow, record flooding in Pakistan and a series of intense thunderstorms knocking out power around Washington, D.C., are signs of global warming. This seems a strong possibility.

It must be sweet to be super-rich and also bathed in public adulation, as were the 40 super-rich people who just pledged to give away at least half their wealth. This was prominent news around the country, and most coverage was sheer hero worship.

What the coverage missed and should have reflected is disdain. The super-rich being showered with praise — such as John Doerr, Paul Allen, David Rubenstein — haven’t necessarily given away half of their wealth. They only said they planned to make fantastic donations in the future. The media coverage suggests something important has happened. All that’s happened is promises.

Congress plans to cut the deficit. Practically everyone plans to lose weight. FORTY PEOPLE ANNOUNCE THEY WILL LOSE WEIGHT IN A FEW YEARS would not make any front page. Yet the super-rich — who already enjoy too much of what society has to offer — are now warmly being praised for the trivial act of saying they might do something admirable at an unspecified future date.

Last week President Barack Obama visited a General Motors factory to proclaim the auto bailout a success, and today calls at a Ford Motors facility to proclaim the car industry recovered. Sales of U.S.-made vehicles are rising, while Ford – which, bless its internal-combustion heart, refused government money – just announced a $2.6 billion second quarter profit. That makes it time to assess the car companies.

The country benefits from the saving of GM, but at the cost of yet more debt.
Converted to today’s dollars, the 1979 Chrysler bailout – hugely controversial at the time – cost $4 billion. All of it was repaid within three years. The current General Motors/Chrysler bailout – enacted with almost no debate in Congress – has cost about $110 billion, when subsidies to both companies, their parts makers, finance arms and pension plans are taken into account.

Taxpayers are on the hook for General Motors and Chrysler warranty claims should either company still fail, which might cost nothing or many billions. Plus, General Motors received a hidden handout of tax exemption for the first $16 billion of future profits. That brings the current auto bailout to around $120 billion – 30 times the inflation-adjusted expense of the 1979 bailout.

POINTS THAT DIDN’T QUITE MAKE THE MAIN COLUMN:

* This column has been harping on the themes that electric cars are heavily subsidized and that average people are being taxed to support battery-powered luxo cruisers that will be marketed to the well-to-do. Since my latest table-thumping on same, the press has noticed this issue – must have been on the agenda at the latest Media Conspiracy meeting. (Knock three times, the password is “swordfish.”) See here and here and here. But where’s the populist outrage against taxpayers being compelled to subsidize electric playthings for the rich?

* General Motors CEO Rick Wagoner, ousted during the 2009 restructuring, received $11 million in taxpayer money as a severance bonus: had the company dissolved, he would have received nothing. Wagoner did one of the worst jobs in management history – General Motors lost about $65 billion in his final three years. Wagoner invested billions in one of the worst ideas in corporate history, the Hummer brand: a ridiculous rolling gimmick that had no long-term sales prospects even if gasoline was free. (The last Hummer was built in May, and good riddance.) For a spectacularly poor job, Wagoner was handed $11 million forcibly extracted from the pockets of taxpayers whose median family income is around $53,000. Why did the Obama White House approve this obscene tax-funded reward for failure? Why was there no populist outrage?

* Blame some of the near-collapse of Detroit on auto reviewers.
Traditionally, they swoon for high-horsepower, low-mileage cars that offer acceleration and top speed that is irrelevant – or even dangerous – in real-world driving. Because auto reviewers fixated on speed, carmaker executives paid too much attention to horsepower, not enough to manufacturing quality, MPG and safety. The excellent 2002 book High and Mighty by Keith Bradsher not only offers what reads, in retrospect, as a prescient warning of Big Three arrogance and slipshod management. The book also contains a hysterical description of an auto-reviewers’ junket during which Big Three publicists lavished favors on reviewers who, wagging their tails like lap dogs, later wrote press-release-like “stories” exalting the huge engines of the most wasteful new models.

The fight over whether to let tax cuts enacted under George W. Bush expire at the end of 2010 is being waged in terms of political sloganeering — “taxes are an outrage” versus “the rich must pay.”

Here’s the uncomfortable point few want to face: even if the rich do get hit with a federal income tax increase, the middle class must bear much of the cost of fixing America’s budget-deficit mess. Taxes should rise, not just for the rich, but for most Americans.

The current fiscal year federal deficit is running at $1.4 trillion; the outlook is for year after year of very high deficits, and this is before the Baby Boomers retire. Adjusting to today’s dollars, the United States has incurred more debt in the last decade then during the entire combined previous 211 years of the republic’s existence. Unless economic growth rises to about five percent per year and stays there for some time — which is possible, but not likely — tax increases and benefit cuts are the only ways to address record debt.

POINTS THAT DIDN’T QUITE MAKE THE COLUMN:

1. The main column does not note that some federal taxes will rise in 2011 regardless of what happens with the Bush cuts. President Barack Obama’s health care bill raises Medicare taxes to 3.8 percent from 2.9 percent for many filers, and imposes Medicare taxes on capital gains, dividends and interest income earned by the top three percent or so of households. Thus taxes are on well-to-do are already headed up.

If, as expected, Congress increases the capital gains tax to 20 percent from 15 percent beginning in 2011, tacking on a 3.8 percent Medicare levy means the effective capital gains tax rate will rise to 23.8 percent for individuals earning $200,000 or more, or couples earning $250,000 or more. This higher taxation on the well-off is strictly to pay for new subsidized health care — none of the added revenue will offset the national debt. In effect, it’s an income transfer program, and perhaps justified to increase social equality. Will those who receive the new subsidized health coverage, paid for by others, show gratitude or merely complain that they didn’t get even more?

2. The main column uses simplified numbers for the sake of argument — anytime tax law changes, there can be unintended consequences on economic behavior.

TOP SECRET:

The Washington Post has done a great job with its series showing that in the wake of 9/11, hundreds of private companies and nearly 854,000 people have gone to work in classified areas. Are they doing a great job? Maybe. There hasn’t been another 9/11. Are they trampling civil liberties? Maybe.

From years of observing Washington, my worry is that the new security bureaucracies are just like other bureaucracies — featherbedded with five people for each one who’s needed, groaning under the weight of senior managers who do little but fight over the signing of memos, dedicating 75 percent of daily time and effort to the staff’s own comforts and sinecure.

But we’re not allowed to question them because everything they do is secret! Set aside that federal agencies long have stamped TOP SECRET on newspaper articles or commercial airline itineraries. Federal personnel love the word “secret,” and all its variations, because it makes them seem more important.