Opinion

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.

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.

The good and bad of 2011

Dec 15, 2010 17:54 UTC

With 2011 around the corner, what big developments might be expected in the coming year? Here are a few possibilities, bad and good:

Bad: Freshwater shortages. China is depleting its aquifers at an alarming rate in order to grow rice, the most water-intensive cereal. Freshwater supplies are approaching critical in much of the Middle East.

Discussion of climate change has focused on rising temperatures, which in and of themselves aren’t a threat and have some positives (such as lowering winter heat demand). As UCLA geographer Laurence Smith shows in his important new book The World in 2050, nearly all our globe’s surface freshwater is in glaciers and snowpack. Warming is causing “more of the world’s water to leave the mountains to run to the sea,” warns Smith, and “no amount of engineering” can reverse this loss in the short term.

Tax cuts and giveaways won’t save the economy

Dec 8, 2010 03:05 UTC

“If we don’t take meaningful steps to rein in our debt, it could …  jeopardize our recovery.”

–President Barack Obama, January 2010.

“Next year [I will] start presenting some very difficult choices to the country” on debt reduction.

–Obama, June 2010

Bartender, giveaways for everyone!

–Essentially what Obama said, in so many words, December 2010.

Barack Obama pledged to reduce the national debt during his presidential campaign, but instead has added $2.7 trillion to that debt so far – more than the entire national debt in the year 1975. Throughout 2010, he repeatedly promised there will be no more treating the Treasury as a cookie jar. Now, suddenly, there will be $900 billion in new giveaways, financed entirely by borrowing.

One of the world’s most significant documents

Nov 17, 2010 16:27 UTC

This morning (Wednesday, November 17) I am in Washington moderating the launch of the United Nations Human Development Report 2010, one of the world’s significant documents. Most of what we hear on the news is a noisy blur of specifics even the participants can’t remember a week later. This annual report details The Big Picture: the economic, social, educational, political and health care situations of the world’s nations. The report is roughly 10,000 times more important than the Wall Street data, political polls and sports stats we obsess over.

Perhaps you assume that as a product of the United Nations, the report is political hot air. Quite the contrary: the report is candid, factual and rational, because it’s written at the United Nations Development Programme, which functions independent of the General Assembly and Security Council. United Nations population forecasts and agricultural analysis have high standing among experts. So, too, does the Human Development Report.

And perhaps you assume that any United Nations document is alarmist cant. Again quite the contrary: the 2010 Human Development Report is mainly optimistic about the developing world. It paints, in fact, a far more sanguine picture of most of the human family than is found in the mainstream media. When the United Nations says something depressing, coverage is always assured. Today, the United Nations says something hopeful – will the world pay notice?

Why a Republican House will make Obama a better president

Nov 11, 2010 11:00 UTC

CLINTON/

If you are a Barack Obama supporter — as I am — you should be glad the House of Representatives is changing to Republican. For this is likely to make Obama a better president.

Bill Clinton was ineffective in the first two years of his presidency, with Capitol Hill debacles on health care and the forgotten BTU tax. Then Clinton’s party lost the House in 1994: and his performance as president began to improve.

Sure, there was some kind of fuss between the White House and the House regarding somebody named Monica. But all of Clinton’s signature achievements — welfare reform, the Good Friday Agreement, conversion of federal deficits into surpluses, the Camp David summit — came after the Democrats lost the House.

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