ECONOMISTS FOR PEACE & SECURITY
BERNARD SCHWARTZ SYMPOSIUM

INEQUALITY, AUSTERITY, JOBS, AND GROWTH

SESSION THREE:
GLOBAL SECURITY AND ECONOMICS: DANGERS AND HOPES

November 18, 2015
Washington, D. C.

 

 

 

RICHARD KAUFMAN, CHAIR:
          Good afternoon, everybody. I’m Richard Kaufman, vice-chair of Economists for Peace & Security.
          I’ll make a few comments to provide a little bit of an overview of defense and security, and then our panelists will follow.
          Questions of war and peace and war or peace will always be with us apparently. There seems to be an irregular cycle for these questions, and we are now, in Washington at least, in a period of rising war fever, if you look at the newspapers and follow the media and comments by various experts and government representatives, all, of course, in the immediate aftermath of the Isis attacks in Paris and elsewhere. In the presidential campaign fears of a possible Isis attack in the US and the passage of time since the last major war under Bush ’43 are continuing factors to the idea that what we need is a reversal of President Obama’s reluctance to commit more resources to the conflicts in the Middle East. It would be well, therefore, to remind ourselves how expensive the war was and will continue to be in Afghanistan and Iraq and how much we are spending for defense.
          The graphic on the screen illustrates the trend in defense spending since the post-World War II period, and the steep rise since the end of the Cold War, overlaid by war spending on top of that trend. The budget grew by about 60 percent from 1998 to 2010. Since 2010, the defense budget and war spending have fallen significantly, by about 20 percent. The total costs of the war in Afghanistan and Iraq are estimated, reliably in my view, at about $4 trillion, taking into account medical and disability costs, which continue long after war’s end.
          Finally, numerous economists have pointed out that defense spending is harmful to the economy, contrary to some conventional wisdom that it props up the economy. Defense spending diverts resources that could be employed to more productive ways. It raises incomes for the many rather than for the few, namely, defense contractors [sic], and rather than providing needed non-defense goods and services such as infrastructure, roads and bridges, which create civilian jobs and incomes. And by the way, studies show that more jobs are created by non-defense spending than by defense spending.
          With that I want to move to our panelists, the first one of whom will be William Hartung. And you might introduce yourself to save time.

BILL HARTUNG:
          Thank you, Richard. I’ll be brief in introducing myself because I can’t really remember what I’ve done. I work at the Center for International Policy. I run a project called the Arms and Security Project, and I’ve been working on issues of politics and military spending since the late Carter administration. We seem to go in cycles on these issues, and the attacks in Paris and Beirut, and the downing of the Russian airliner, following on all the attacks we’ve seen all over the world have raised the question of, has everything changed? Are we in a new phase? Are we going to have to change our entire strategy? How shall we respond?
          I think a lot of the simplest calls have been, let’s step up military action, let’s crack down on immigration, let’s up surveillance—all of which were tried after September 11th in a misguided way primarily in Iraq, and, as Richard mentioned, it cost us a trillion dollars, thousands of lives, put a sectarian regime in power, and helped create some of the conditions that led to the growth of Isis—certainly not all of them, but it was a contributing factor.
          So I think we shouldn’t be completely governed by short-term emotions here. One thing I want to talk about is the need to rebalance our foreign policy tool kit. We should be using not just the military, but economic means, diplomatic means—the full array of ways in which we can relate to other countries and deal with non-state actors. And my fear is that we’re going to tilt heavily in the direction of military tools, at least in the short term, which I think will be a mistake.
          I think we need a healthy understanding of the limits of military power. We saw it in Iraq, as I mentioned, in Afghanistan, after the longest war in US history. We’ve got a large problem of corruption. The Taliban is still quite capable. The notion of a military victory there is not anywhere in sight. In Yemen, which is rarely discussed, our government is arming a Saudi-led coalition which has created one of the greatest humanitarian catastrophes in the world probably short of Syria. There are thousands who have been killed in the bombing, cluster bombs have been used, there’s a near-famine in the country because of the blockade that’s been implemented. Groups like Amnesty International and Human Rights Watch have suggested that both sides may have engaged in war crimes. And just recently a bill to give the Saudis more bombs and ammunition from the United States was [?] to Congress. I think activities like this in support of a putative ally like Saudi Arabia just make the situation worse in the region in terms of the US reputation, in terms of the lives of the people there, in terms of sorting out the other conflicts that we’re going to have to deal with.
          And then of course there’s the issue of targeted killings. And I think it’s fair to say that, although they’ve been effective in taking out particular leaders, they haven’t weakened substantially the terrorist organizations that we have to deal with.
          So how do we rebalance? Some of it’s going to be a longer-term proposition; but I think we have to start now. The Pentagon receives 12 times as much in terms of budgetary resources as the Department of State. And as Robert Gates pointed out in his speech a couple of years ago, there are more personnel in one aircraft carrier task force than we have trained diplomats in the entire Department of State, and we have 10 aircraft carrier task forces.
          On the flip side, we have the most powerful military in the world The question really is when it’s appropriate to use it. We spend more than the next seven countries in the world combined; we spend about three times what China spends. We have 1.4 million troops in uniform, not counting reserves. We have 700 military bases, give or take; 10 aircraft carrier task forces, as I mentioned; 60,000 special forces troops, which is far more than any other country, larger than the militaries entire of other countries, and they were active in 133 countries in 2014. We also give military and police aid to 163 nations. So we have genuine global reach with our military, and the notion that we are not able to engage in conflict anywhere in the world is not really the point.
          The question is whether the military is the right tool for the job. And for some of the longer-term threats, it’s obviously not. Climate change, epidemics and disease, the spread of nuclear weapons—military force is not going to help resolve those. But also I would argue in the case of terrorism, it’s not a solution. Perhaps it can be part of a mix of policies; but the notion of leaning too heavily on that tool I think will just make matters worse than they already are.
          So I wanted to look at the example of Iran and the diplomacy there. Obviously every situation is different, but I think there were a couple of important factors in the Iran deal that could guide us in dealing with other conflicts and other issues. First of all, it was multilateral, the permanent five members of the Security Council plus Germany; so you had countries like Russia, which [is] at odds with the United States, sitting down at the table with us, putting pressure on Iran; countries like China, which had commercial relations with Iran in the past, onboard for negotiations that would curb their nuclear program. The other thing about the negotiations is they didn’t involve maximalist positions; so the notion that Iran would just automatically cast aside the notion of ever enriching uranium again was taken off the table. And the idea was limited enrichment for commercial purposes under strict supervision by the international community and the dismantling of large portions of their existing military nuclear capabilities. But if the position had been, we’re going to sanction you until you cry uncle, we wouldn’t have gotten anywhere. I think that’s something to keep in mind.
          Also, we have to be patient and persistent. Deals like this have been floated going back as far 2003. And when President Obama reengaged in the process, the press coverage was pretty much— You know, they’d have a three-day meeting, and they’d say, Well, see? They didn’t solve anything. And I think you need a much longer perspective to see these things come to fruition. So patience and persistence.
          And of course it takes strong presidential leadership. You just have to look at the political controversy in this country about getting the deal through to see that without strong support from President Obama this deal would never have happened.
          And then finally, it’s a process. The deal is the beginning of the process. It’s got to be implemented. It’s got to stay on course for 10 to 15 years. All the countries involved in making the deal have to hold Iran to its promises, and also deliver on the promises that they have made as part of the deal.
          So can we apply this anywhere else, I mean only in the most general terms? But if you look at the situation in Syria, I’m encouraged that the administration is part of a process that includes all the players that view themselves having interests in the region, including Iran and Russia, where most likely they have leverage over Assad to get him to step down in some sort of transitional arrangement. But I think anybody who has the idea that we can defeat Assad militarily, that he can step down without some sort of assurances of his future, I think are barking up the wrong tree. So there’s going to have to be some version of compromise, not least of which because of the contending interests. The Saudis have their own group of jihadists that they support; Turkey’s often more concerned about the Kurds than it is about Isis; Iran and Saudi Arabia are at loggerheads and yet sitting at the same table. There’s a question of whether Russia should have an ongoing presence in Syria. And of course if you held elections you’d have to figure out how to get all the refugees to have a say in those elections, which would be quite a logistical undertaking.
          So I’m not saying diplomacy would be easy in Syria; but I think it’s far preferable to the alternative, and it’s got to be vigorously pursued. And I think the administration will do so.
          Then the other thing that I wanted to talk about is we need to beware sort of the bait-and-switch tactic that the Pentagon and the arms lobby are going to bring to bear as part of this crisis. After September 11th, we doubled our Pentagon budget, much of it having nothing to do with fighting wars, just squirreling away pet projects that the Pentagon had wanted for years. And in fact a vice president at Boeing was crowing over the impacts of the intervention, and he said, Anybody who opposes us on this is going to lose their job next year in Congress. So Congress is already talking about putting more money in the war budget, even though only about 10 percent of it so far goes to fighting Isis. Most of it is for unrelated matters, and if they need to up spending on the war, there’s plenty of money there to do it without busting the current budget agreement.
          So the other thing I would say: We need to do some positive things. We have to be more engaged in refugee aid. We have to have a long-term strategy for how to build sustainable, democratic, economically rewarding societies, not only in the region, but in Europe and the United States as well. So that runs quite counter, I think, to a lot of the discussion and hype and shouting that we’re going to hear on the campaign trail; but I think it’s the only hope we have of really turning around this very difficult situation. Thank you.

CHAIR:
          Cyrus Bina will be next.

CYRUS BINA:
[accent is heavy]
          Thank you very much.     
          My remarks will perfectly dovetail with what Bill Hartung already [said], and probably he was reading my mind. But for the sake of brevity I would like to just read very quickly the things that I’ve written. The first part of it would be the context, the context in which Iran deal should be compared. In other words, Iran deal is not an absolute element. It’s relative. Relative to what? To what has existed already. So in that case allow me to read that, and then demonstrate why Iran deal is one of the achievements of this administration.
          In July 2015, nuclear accord signed in July in Vienna known as a joint comprehensive plan of action between Iran on the one hand and the six world powers--China, France, Germany, and Russian Federation, plus United Kingdom and United States--must be considered as a watershed, particularly in the US foreign policy in recent decades being multilateral, as Bill said, by design JCPOA is practical, pivotal, and purposeful from the standpoint of peace and security in the region and beyond. It is also one of the great achievements, as I said, of the Obama administration in foreign policy.
          By all accounts, we are now living in the post-Cold War, post-9/11, post-Bush-Cheney period, with the so-called War on Terror that is a permanent war. Foreign policy is either explicitly or implicitly, purposely or unknowingly entwined with the mind of the foreign policy folks and legislators across the aisle here in this country. In such a milieu it is often easy to mistake the strategic goals from the tactical ones, being sidetracked and thus consumed by too many contingencies that come [in] one’s way, particularly random contingencies that the historians in the future may consider as naught, zilch, zero. This state of affairs is in part due to the numerous global change[s] on the one hand, and the US lack of ingesting and digesting of [them] on the other, despite the rhetorical responses in the foreign policy circles and in part due to what comes back to the same thing, that the traditional US foreign policy machinery exhibits little acknowledgment of diminished and diminishing US political power around the world.
          In the last two decades or so examples are plenty: invasion of Afghanistan and Iraq; wholesale destruction of Libya, which is, by the way, United States deliberately hoodwinked Russia on the removal of Colonel Qaddafi; and by proxy the whole self-destruction of Yemen, a gesture of involuntary high-five to Moslem brotherhood; and then, with some public displeasure, giving green light to the el-Sisis in Egypt.
          Now, there’s another point dealing with Ukraine, providing free hand for the neo-conservatives such as Victoria Nuland in the state department. This was done on Mrs. Clinton’s watch to foment a coup in Ukraine and thus losing face by misleading—or miscalculating, rather—the balance of force there that would lead to secession of Crimea, and it’s grabbed by the Russian Federation and its irredeemable return to Ukraine. And leaving the door open for the right-wing hardcore anti-Semite elements to lurk freely and [?] underneath any potential leader that could do the US bidding in the future power struggle in Ukraine.
          And also by saying no to Assad of Syria as matter-of-factly and by happenstance. And I must say to grudge against Iran and Russian instead of rational policymaking, that’s advertently or inadvertently unplugged the wormhole of history--I’m just using one of the terms which is used by the astrophysicists—and then creating chaotic ground for reactionary forces, including Isis.
          Since I have not much time, I would like to make five points very quickly about Iran deal:
          First, this deal was a result of some 22 months of intensive negotiation between Iran and the so-called five-plus-one powers. And of course it just opened the door for the so-called normalization—potential normalization—in the future. And of course one has to understand that the background of the whole thing about Iran is 1979, the removal of the Shah by the Iranian people, and then the question of going back even further, 1952 coup, CIA coup.
          Second, the deal was multilateral, as Bill said. And I’m [now/not?] going to go through it very quickly, and it is extremely important these days to be able to follow the multilateral policies in foreign policy.
          Third, this deal was made in the spirit of NPT, it was foreign NPT, and it is extremely important to recognize NPT by reduction of nuclear arms, which then leads to the question of fourth point, which leads to question which the three countries, India, Israel, and Pakistan, which are not a member of that. It would be very important to persuade them to become a member.
          And the fifth would be the question of NPT, article 6, that we as Americans are not following it, the United States, the reduction of arms, nuclear arms, all the way. The club, the nuclear club, is not doing it, and of course—
          Let me conclude, because my time is up: This is truly in my judgment that this has been a very great conduct by the present administration following what Obama administration has done on Cuba, and this will remain as a legacy of this administration in my judgment. Thank you.

STEVE CLEMONS:
          And I’m just going to stay right here. Hi everybody, I’m Steve Clemons with The Atlantic. I want to recognize first of all Jamie Galbraith. It’s great to see someone who’s such a profound a thinker and a doer out in international affairs, and my good buddy and friend, Michael Lind, who knows so much more about this subject, and really ought to be up here in my place. And since I’m leaving at exactly 12:50 to go get on TV you’re welcome to come up here, Mike, and take over.
          But let me just share a few strands of thought. And hello Alan Medelowitz, and Heather, and everyone—good friends here.
          I have a few strands:
          I think that conversations like the one we’re having today struggle between the tension between micro situations, whether they may be Cuba, or Crimea, or many of the things Cyrus just said, and an absence of sort of large-scale strategic vision or strategic desires. I mean, right now, today, I think one of the really interesting things about this town is a strategic incoherence about what it actually wants in the world, and it thus creates very powerful machinery that can be easily hijacked by events, it can be hijacked by causes and crusades and interventions. Snd so the machinery that exists ostensibly to protect the interests of the United States often can undermine those very interests in the way there’s no cohesion in how that is used.
          Mike Lind has heard this joke of mine a few times, but it actually did happen: [?] visited Washington a number of years ago and brought along his policy advisory staff. And I sat next to one of these guys who would have been the equivalent of some sort of director in the policy planning division of the Chinese Ministry of Foreign Affairs. So when I was invited over there I wanted to get into the deep bowels of the Chinese government. I said, So we’ve all been wondering what China’s grand strategy was. And China and these guys said, Our grand strategy is to try and figure out how to keep you Americans distracted in small Middle Eastern countries. Because life is good for them. But it reinforced the point, joke or not, that right now the US is easily distracted, can easily chase rabbits down rabbit holes. And we have this kind of global whack-a-mole phenomenon where nothing is enough. And what this translates, whether it’s real or not in terms of absolute levels of spending, weapons, the size of the military, what is true perceptually is the United States seems to be in some form of strategic contraction that it seems unable to convince allies that it can still provide deliverables in the international security arena as it once did.
          And the first reactions to that are that ostensible allies, be they—I wrote a piece once on just looking at the difference in behavior of countries like Japan and Germany that, let’s face it, were satellites of American interests after World War II. They hardly enjoyed their own sovereignty in my view. But they began to take different positions. Israel and Saudi Arabia, two rivals of each other, but still joined at the hip with US strategic and foreign priorities, are also behaving differently because they don’t believe the United States is fundamental to shaping the circumstances around there. So there’s a global fragility that is occurring throughout the system based on a doubt in America’s ability to deliver for them. And of course that’s before you even get to the foes who I think are moving their agendas in various ways.
          So at New America, where I was with Mike Lind, one of the things that we thought about [that] needed to be done to sort of restore the stock of American power, or the perception of it, is to move the needle on a certain number of issues. And the ones we worked on at the time were Israel, Palestine, Cuba, and Iran, because we saw those as not quite Nixon-goes-to-China moments, where you can pivot at a key inflection point and change the way the world looks at your ability to do things. Now, the Israel-Palestine front was not the one we would have led with had I been running the National Security Council for President Obama; I probably would have done the Cuba deal the first year I was there. So I give President Obama credit on Cuba, but I give him a C for late arrival, because the impact that that attempt to get US-Cuba relations— I don’t give a damn about the Cubans. I do care about the echo effects that that decision would have had on the way US policy is perceived both in Latin American and globally; and that would have had a far greater impact in the first two years of the Obama administration, rather [than] in the twilight of the administration in which the impact of that is not quite as much.    On the Iran deal, major effort, I supported the Iran deal. I sort of think that it is, the jury is still out in terms of what happened; but the Iran deal doesn’t matter in terms of just stopping Iran from getting a bomb. What does matter is it convinces the world, even those doubt US power, that US has the ability to shape the international order still, and to do so in a way that can be perceived as good. And there’s a respect even among the Saudis and the Israelis that the US and its allies were largely able to do this and to move it forward.
          The question is, what momentum does that give you to move into other arenas? That is an absent discussion. What is the president of the United States doing now to take the momentum from Iran and to move it into other problem areas? And I see all that gone. We’re living in kind of an ad hoc or a la carte foreign policy that is bizarre and, I think, undermining US power.
          Not to over-reference Mike Lind, but he has written a lot  very compellingly that in the world we’re in, in terms of American interests, which remains an important power that will have interests globally and needs to deploy that, what is a better approach? And offshore balancing, trying to pivot between contending parties in the world both maintains the ability for the United States to secure and pursue its interests in a world that will be, yes, more chaotic and have more problems; but it allows us to work with and nurture and help cultivate responsible stakeholders in the international system and to use our weight and tipping point opportunities. But it doesn’t require the very deep kind of paralyzing engagement in all things in which problems around the world are almost instantly Americanized in terms of what America did or didn’t do as the largest explanation for what’s happening in the world, which is a stupid and, I think, unconstructive way to look at what’s happening and unfolding in the world.
          So I think that getting back to a position of looking at how you restore American influence with a more sensible strategy in an offshore balancing model is an opportunity that we should embrace. But this requires people in an administration to actually have a kind of consensus understanding of what their purpose is. It’s really interesting to watch the Obama administration trip over itself in Syria and other places. I understand and I sort of support the president’s arm-length distance of not wanting to intervene more deeply in a place like Syria because it’s a quagmire by definition waiting to gobble up and consume powers that might go more deeply. But the fact that he goes halfway in, or partway in, with 50 special ops, and can’t maintain a cohesiveness of direction is something that greatly disturbs me.
          So I don’t have the insights into how to fix it other than I think Mike Lind knows the answers; but then you have to have a broader consensus and understanding among people in pursuing it, and that doesn’t exist today even in the Obama administration which itself tends to pull in different directions. And you can just go and look at the words of our secretary of defense, Ashton Carter, measure them against the words of someone like Susan Rice, compare them against the words of other players engaged in international affairs; and you can’t find a cohesive view amongst people employed by the same man.
          So with that friendly and happy though I will turn it over to Heather.

HEATHER HURLBURT:
          Great. Thank you. I will follow Steve’s lead by sitting here and talking more conversationally. I’m Heather Hurlburt. I run the New Models of Policy Change program at New America, and have spent the last 20 years in and out of government working at the intersection of American national security policy and politics.
          Steve, I’m going to pick up with a strand that you introduced, the idea that we don’t have, or we have contending visions of what this is all about. I’m going to get around to arguing with you on some of what you said, and I’ll try to do it fast enough that you’re still here when I get there.
          So what I want to do is rip through about six theses that you often here as underlying explanations or founding principles from which we can jump off to deal with this messy world, and suggest to you that all of them are wrong. So:
          Number one: We’re not in a war on modernity. We are not in a world of medieval versus modern, and frankly, the next time you hear someone say that, you should really question their knowledge of the medieval period.
          If you look at Isis, right, Isis could not exist without diffusion of power that we’ve only seen in the modern or even post-modern age. Isis could not exist without a multi-continental, multi-ethnic strategy that has only been possible in the modern era. Isis could not exist without modern communications tools—again, not even modern so much as post-modern. The more time I spend on Twitter, the more post-modern I feel.
          So Isis is a thoroughly post-modern phenomenon with a set of values that one might describe as medieval, although in some respects I feel that that does a disservice to our medieval ancestors.
          The reason that this is a problem, this slogan, is that, number one, it makes us feel too good about ourselves; and number two, it makes the problem sound easier than it is. Because after all, our modern society and the modern military that Bill talked about are so superior to anything medieval, right? No. Don’t think about it that way.
          So number two—and this is so obvious, it really shouldn’t need saying, but it’s fun to beat up on this one: We are not in a war for Western values. We are not in a war for Western civilization. We are not in a war of the West against the rest. And I’m really shocked at how often I hear this from people who should know better, who come from very multicultural, very successful multicultural, multi-[confessional/conventional?] societies.
          What’s my evidence for why this is wrong? A couple of reasons: Number one, actually and somewhat surprisingly, the core values that we like to define as Western—you know, the ones that are in the UN charter, that bit of Western imperialism (I should do that in quotes for when it gets excerpted and taken out of context from the video)—those values actually somewhat surprisingly get as positive a response around the world today as they ever had. So it just isn’t the case that citizens of the world, citizens of the Middle East, are looking around and saying, --Nah, we hate this idea, we hate your freedom.-- No, they don’t hate our freedom. -----We hate your personal security. --No, they don’t hate our personal security. --We hate the idea of individual liberty. --Well, no, actually not. So this is a really foolish and unfortunate idea because it blinds us to where our allies are, and frankly, to where our opponents are.
          Now that gets me to my next point, which is a little bit more worrying. You are seeing around the world, and particularly in Western democracies, citizens are giving up on old models and structures that promised solidarity and promised progress toward those values, if you look at the Israeli elections, the British elections, if you look at the decline in popularity of the EU for a number of reasons that were touched on at some length in the previous panel, if you look at the failure, I think we have to say, of the Arab Spring to produce the kind of governments that many of us nice squishy Westerners hoped and thought that it would. And if you look in all of these places, you don’t see a good model coming along very quickly to replace the models that are limping, weakening, or out-and-out failed at this point. So that is something very real that is happening that we should all be very worried about, and frankly I think those of us who look at the American political system also need to be asking ourselves to what extent our citizens have at some level given up, not on American ideals, but on the structures and institutions that they’re presented with to carry out those ideals. And we’re so fixated on the particularly American characteristics of this failure, whether you’re particularly fixated on Donald Trump, or Ben Carson, or the entirely fact-free debate over refugee policy; but we should recognize those as parts of more global phenomena which are also affecting our friends and allies. And we may not find it particularly consoling, but it is an important fact to notice that we’re not actually floating out there alone and unique; although I won’t try to take Ben Carson’s uniqueness away from him.
          I would then come to another point where I think I differ with Steve a bit, which is to say that in my mind the question is less, Can the US deliver globally—and Steve is absolutely right that the question is framed that way, perceived that way in many capitals and among many elites that formerly perceived themselves as the closest allies to the US; but at least as important is the question of whether, in a world in which power is diffused, as it hasn’t been in a quite long time, in which not just is there a tier of contending nation-states that weren’t there during the Cold War, but the power of arms, the power of communication, the power of persuasion, economic power have moved away from governments in ways that we haven’t seen arguably since the pre-modern era.
          And so then to my mind the real question: Can anybody deliver in the way that, say, Japanese, or German, or Belgian, or Israeli, or Saudi elites were accustomed to having the US deliver for them back in the good old days? And I would describe the struggles of our friends in the Obama administration a little differently, which is to say that they came into office desiring and believing that many of our allies were eager to take on a little more power, decision-making, responsibility for themselves; and that transition turns out to be a whole lot more difficult than anybody thought. And [in] the effort to transfer power, power leaked to other places. And here we are.
          So that brings us to the next myth I want to explode, and that goes back to something, Richard, that you said at the start of the panel. I’d argue that we’re not actually in a climate of war fever. And one of the really most schizophrenic things about our political scene is that our politicians know that, know that the country’s not in war fever. What is the country in? Fear fever. And fundamentally why is the country in fear fever? Number one, because it can’t get away from these pictures of people being gunned down in restaurants and bars and concerts. Point number one. Point number two, and this is where we turn to the, Why-is-this-panel-relevant-to-a-roomful-of-economists segment of the conversation: Because the same neural pathways that are getting jangled every day by the idea that—Bye, Steve—the same neural pathways that are getting jangled by alarms and by the idea that we could all be gunned down in the metro on our way home are also getting jangled by the idea that we might check our phones after this and our job might be gone; our pension, for those of us who still have pensions, might be gone; for those of us who don’t have pensions, our 401-k might have collapsed; our kid might not be able to finish college; we may not be able to send our kid to college; our kid may not get into college. We are living in an age where economically we’re jangled every minute of every day, and our neural system, sophisticated though it is, once you get to fear, it doesn’t actually differentiate between Isis and the stock market. So our fellow citizens are living on the edge all the time in a way that makes us, all of us—this is true of us good liberals, too—small ‘c’ conservative, more hostile to outsiders, more interested in solutions that look for ‘in’ groups and ‘out’ groups.
          Now, I want to mention one or two positive things, having just, I think, succeeded in painting a picture at least as bleak as Steve’s, if not more so. What’s growing? What are some good things that are growing? The interesting thing is that we are seeing people put more and more trust, sometimes to my mind in a misplaced way, in networked, hard-to-see, new-style institutions, structures, ways of organizing across borders. And I would argue actually the Iran deal is a really interesting manifestation of that within the international system, because it leans on the UN, but it’s not the UN; it leans on the Perm Five, but its not the Perm Five; it leans on the EU, but it’s not the EU; it leans on the Non-Proliferation Treaty machinery, but it’s not that; it leans on the IAEA, but it’s not that. It’s a group of countries that came together to make a deal.
          Now, on the one hand, there’s lots of good theoretical reasons to dislike that, because it’s just a group of powerful countries deciding what they want to do. On the other hand, it’s highly effective, and it got us somewhere we couldn’t get otherwise. So I present to you the way of the future in international diplomacy.
          Similarly, look at the climate summit that seems likely to go ahead in Paris and seems likely to produce some agreements which seem to be real and serious and will result in real change for real people all around the world; but that are highly unlikely to look like the old-fashioned model of legally binding, universally applicable, same-rules-for-everybody UN conventions. So, again, you have a new-style model.
          In international non-governmental organizing you have models like the [OPEN?]. founded by some of the founders of the Move-On here in the US, with the idea that what was really needed was for activists around the world to have direct connections with each other and organize together. Avaaz, founded on a similar model, growing by leaps and bounds, while frankly many traditional peace organizations are struggling. So we do have interesting new-generation models in the public sector, in the private sector, in the NGO sector, where interesting things are happening. So I would push that as a model for hope.
          Now, lastly, what can you do as economists? So I have a couple of—two specific requests for you in relation to this: We are more than ever in a phase where the need for understanding of the connections between what goes on domestically and what goes on internationally has never been greater. And as you all know from every day, illiteracy has also probably never been greater, or maybe it has been greater, but you just couldn’t go on Twitter and trumpet your illiteracy before. So there is, if I may say so, a screaming need for more intelligent, layperson-language-friendly—Let’s have more presidential debates where people are fighting about economists, right? How great was that? So you all do have a very important role to play in this.
          And I want to end with a specific example, which again goes back to something that Richard and Bill said at the beginning. I can’t believe the number of very smart liberals and progressives who’ve said to me in recent weeks, Oh, but military Keynesianism, Heather, it’s actually really critical that we keep growing the defense budget. And I said, Um, you guys know there’s some really good academic economic work making the points that were made earlier about military Keynesianism being just about the worst kind of Keynesianism there is. If you actually want to grow the economy, anything else that you spend money on in government would have a higher multiplier. The studies that looked at that are, I believe, close to a decade old now. It would be great to see some new work looking at what are the consequences of how we spend money in a highly constrained resource environment? What is the truth about where Americans can spend money in ways that will actually ease the jangling of nerves in their mind both security- and economic-related.       
          So thank you all very much for having me.

CHAIR:
          Well, we do have time for a few questions, so let’s proceed.

Q:
          Jim Chase. I’m kind of a semi-retired [?] consultant. My concern is that we’re currently on shaky foundation. And I really appreciate the last two speakers about the fact that just changing chairs isn’t going to affect us. We’re going to have to bring in some new paradigms and possibly—It seems like the foundations, where they’re really shaky are the Versailles Treaty, where we created a peace to end all peace by giving up the Middle East in the space of a half an hour, or in the space of a couple of afternoons between Britain, France, with a little input from Italy. We created a place that’s basically undefendable at this point. And I think Breton Woods, based on earlier panels, with the kind of foundation that we created there was a world that no longer exists. And one of the things that we need to have is a mea culpa to say all the things that we’ve—I mean, Iraq has created Isis, I mean invasion of Iraq. We made a big mistake there. That’s not a mistake, but it created a [?] against the Soviets has led to the Taliban, which we’ll be fighting indefinitely.

CHAIR:
          Could I interrupt and ask you if you have a question.

Q:
          Well, no, the question is reworking the foundation. I mean we really need to think outside of the box. Real politics will not solve the present situation. We need to create something new, and I’m just wondering if you agree with me and whether or not, what that might be.

CHAIR:
          Well, I agree with you, and I think most if not all of our panelists agree with you, but let’s get another question before we call on the panelists.

Q:
          Holly Cleveland, again. I sort of felt I was coming from a parallel universe in the previous panel. I’m very familiar with Bob [Polan’s?] work at the University of Massachusetts in which military spending is so bad for the economy—You were talking about how bad austerity is. I think the best kind of austerity might be to cut back military spending. So in other words, when you’re talking about—and […?] pick up on Heather—when you’re talking about spending or not spending, it depends on what you spend it. And if you can cut military spending and invest in the children, it doesn’t matter if you have a little austerity of military spending. I’d just like people to follow up on that connection.

CHAIR:
          Yes. Let’s get one more question.

Q:
          Hi. My name is Joel Yutkin, High Road Strategies. Heather, I was appreciating you pointing out that, you might say the social psychology that’s underlying a lot of this, and it’s happening here. But I wanted to point out, or just point out that in the Middle East, if I’m a Middle Eastern youth or family, the fear is jangling even more, for a longer time, and it’s tied to a lot of the policies that have been going on for a number of years. And I see Isis and groups like that as an attempt to answer and address the fears, and having some success. It’s a good sign that somebody’s getting beyond their fear, if they’re willing to kill themselves in order to fight the battle, because they’re going to have some kind of reward in the afterlife, and so on. And of course I think it’s a very perverse kind of think, and we’ve seen it before in history. And I think even on the right wing in this country that plays on the fears here.
          I was wondering in terms of a strategy for understanding that, what does this mean in terms of dealing with Isis and what’s going on in the Middle East, and how we address both the short and the longer term; because the short term, maybe we have to deal with the threat itself, but the longer term is we have to find a way, a strategy which really deals with the underlying cause of those fears, the economic and the political, and so on. And I guess that’s where I feel there’s just no clarity in that at all.

CHAIR:
          Heather, do you want to respond.

HH:
          Sure. So in a way, what I was going to say in response to your question is also relevant to that. So the big mistake that I think we risk making right now is moving to a place where we say, Yes, the problem is that we, the US, don’t have things figured out for all the rest of you. And once we figure out what the post-Versailles order should like, we’ll just let you know, and then we’ll recruit some peacekeepers to enforce it, and then it will all be good again.
          So fortunately or unfortunately I don’t think we actually have the ability to enforce such a thing. But I see there being a very great risk, and the thing that we need to learn from how the world is organized now and how things that do work, work, is that we’re going to have to have something that at least feels to the people living there like it’s bottom-up. I’m not so naïve as to say that all world problems will be solved when we just hand power over or back to the affected people, because unfortunately economics don’t work that way.
          You know, Syria is a great example, right? We’re not going to decide that were going to defend the borders of the Syrian state; nor is it going to be a smart idea for us and the Russians, and the Iranians, and the Saudis, and the Turks to sit down and say, okay, let’s draw some new lines. In my view the only thing that is going to work both short-term and longer-term to immediately stem the violence and in the longer term get some stability back in the system is to let areas emerge on the ground where people are able to figure out governing arrangements, some of which are not going to be too bad, some of which are still going to be pretty appalling. Again, I don’t want to pretend that this is any better than it is. But we are going to have to be very sensitive to what people on the ground want first because, again, we no longer, if we ever did, have the unilateral power to impose anything; and we no longer have the power to prevent people on the ground from telling the rest of the world that they’re not happy with what we imposed on them. So to me that’s one of the great changes of the modern era that I would point to.
          So how do we build on that to think about your question about what’s the long-term solution? And you know really the long-term solution is if—No, sorry, that sounded like I was going to propose a solution in three sentences. But look, the history of the Middle East for 100-plus years now is of simmering rage, despair, and feelings of humiliation about being acted on by outsiders. So in all probability the long-term solution to instability and violence in the Middle East is going to come from the peoples of the region getting to arrangements in which those feelings of humiliation are no longer reinforced. And to go back to my social psychology, it’s very hard to externally remove someone’s feeling of humiliation; you have to do that for yourself; all of which is to say that this is long-term.
          And I wanted not to leave out the question of military spending, and just make an interesting note, which is that the way we got that 20 percent drop in military spending that we did get was that you had a moment where the left said, we need to cut military spending very much along the lines of the argument you made; the right said, we need to cut all spending. And so there was a really heroic effort to say to the right, okay, maybe we can’t stop you from cutting spending, but we’re not going to let you get away without taking the Pentagon along with it. And there were enough really interesting voices on the right who said, why, yes, the Pentagon is part of government, and it is wasteful and inappropriate and too big, just like we think the rest of it is.
          The reemergence of Isis and the drawing near of an election in which Republicans want to play the daddy party against the Democrats’ mommy party mean that that dynamic is gone for at least the next 18 months; but there’s no reason to believe it won’t come back in the future.

CHAIR:
          Cyrus, you have a comment.

CB:
          I think Heather hit it on the right spot. The question, of course, is not behavior question in economics; this is a structural change in my judgment. The global process, the whole globe has changed. Globalization means that when you analyze and go back to 1944, Breton Woods, and there is a Pax Americana, a system, hegemonic system, which was formulated after that and then created some sort of peace, Pax Americana, was over in 1979, in my judgment--1980 or so. And in that sense we have a different world, which is then what Heather is talking about, uncertainty in economics, uncertainty in politics. [There are] elements that are connected to this change, fundamental change. [?] is there, but it’s not as important as it used to be. And at the same time, also the economic consequences of the peace by John Maynard Keynes is also irrelevant when you talk about Versailles.

CHAIR:
          Well, one more short—

Q:
          Pat Malloy. I’m a trade lawyer.  I really appreciate the work that you and Jamie did in putting on this conference, Richard. But when we talk about job growth and inequality, I think for next year maybe one thought: We’ve got to look at the impact of our massive and ongoing trade deficits and what has that done, what has that impact been on job growth and inequality, both here and in Europe. And does that also then create security problems in Asia? I think those issues would be worthwhile looking at in the future program.

CHAIR:
          Well, thank you very much, Pat. And I want to thank the panelists for very original and creative thoughts expressed, and hope everybody enjoyed—

HH:
          Could I actually just say while Jamie’s walking up to the podium that I’ve come to this conference for a number of years, and I really want to compliment the organizers on its growing diversity by gender, race, and age; that it’s really nice to see an audience that looks quite different from how the audience looked the first time I came to this conference. So congratulations to the organizers.

JKG:
          Heather, thank you for that.
          Steve Clemons, and Heather also made this point, that the agreement over Iran represent something broader than itself, but something that can be described a new kind of framework for the American role in the world—not necessarily new, but assuredly better in important respects than what we’ve seen advocated in some parts of the past generation. Our job here at Economists for Peace & Security is to help define that framework, to articulate it, both in the domain of security policy and in the domain of domestic prosperity, which has, of course, an important security dimension. And that is hard work. But one of the contributions of a symposium like this is to help thrash out these ideas in a kind of way that’s very hard to do, I think, in any other format, and very useful and effective in this one.
          So I want to thank, first of all, the panelists, this panel and the two previous ones, for exceptionally clear and crisp and engaged presentations. I would like to thank Mike Lind, Allen Sinai, and Richard Kaufman for moderating the panels and keeping them very much on time. We do this in a format that was first, I think, given to us by Mike that puts us through a morning of really intense discussions, and it has to be done in a very disciplined way. I would like to thank the audience in all of your great diversity for being here, for being with us, and for contributing to the conversation. I would once again like to thank our sponsor, Bernard Schwartz, for making these events possible. And finally and as always, let me thank Elly Warren, our staff, and Thea Harvey-Barrett, our EPS director, for the work that they do, which puts these things together and holds them together with exceptional efficiency and extremely slight burden on the chair of EPS itself, for which I am personally and deeply grateful, Thea, thank you.