Peter L. Berger's Blog, page 187

The Blowhard in Brussels

All the President’s men have rushed to reassure our allies that although President Trump did not invoke the magic words “Article 5,” he meant it. And looked at in a certain light, there were lines in Trump’s speech that do convey the sentiment. But delivered in a snarling way, couched among demands for repayment, there is no escaping that the leader of the Free World alienated much of the Free World yesterday. Judging by the body language of his counterparts, Donald Trump did not have a friend among the 27 other heads of government that are our country’s closest friends and most able supporters in the world.

The French President veered out of his path to embrace the German Chancellor at the other side of the crowd. The more disciplined of Europe’s leaders scowled as he spoke; the less disciplined whispered to each other. President Trump appears to have shoved aside the Prime Minister of Montenegro—the alliance’s newest member, its leader attending his inaugural NATO meeting—to get into the middle of the picture. When the formalities were over, no one spoke to the head of NATO’s leading state, none jostled to be near him.

President Trump acts as though boorish behavior has no consequences, as though other countries have no choice but to comply with American demands. This misconception may be his biggest foreign policy mistake. The likability of Americans and the mutual benefit our policies offer dramatically reduce the cost of all we do in the world. We mostly don’t have to enforce our standards because most countries in the world voluntarily adopt them. Donald Trump’s mafioso approach is not only almost indistinguishable from the countries NATO was formed to protect Europe from, it will also dramatically increase the price of doing what America tries to do in the world.

Yesterday the leaders of 27 allies stood solemnly to commemorate America’s losses in the 2001 terrorist attack on our country. Donald Trump chose that moment to humiliate those leaders. Will NATO allies feel any obligation to contribute troops to a ramping up of effort in Afghanistan? Will allied parliaments support increased defense spending when it will be seen by their voters as rewarding President Trump? If the 9/11 attacks occurred tomorrow, would Europe grieve with us as they did after 9/11?

It’s not uncommon for Europeans to take for granted all that America does well and to be snotty about America’s shortcomings. It’s not uncommon for Europeans to criticize American foreign policy and make excuses for policies of our common adversaries (like Saddam Hussein or Vladimir Putin). It’s not uncommon for Europeans to hold large protests when American officials visit. It’s certainly not uncommon for European newspapers to caricature American Presidents. But it is uncommon for American Presidents to caricature themselves, which is what Donald Trump did yesterday at NATO. And it is uncommon for leading European newspapers to call for the impeachment of an American President, which Germany’s Der Spiegel did yesterday. “His decisions are capricious and they are delivered in the form of tyrannical decrees.”

“Trump has to be removed from the White House. Quickly. He is a danger to the world.”

However tiresome Europeans may be for an American President—especially after the fawning coverage he received in Saudi Arabia, where protests are illegal—their support is crucial to America. They are our closest friends, the closest approximation of our vibrant liberties, the countries who contribute most to the wars we fight and help us advance our diplomatic and economic priorities, the people who grieve for our wounds. Or at least they used to be.

A Blow to the States-Rights Argument For Legal Marijuana

When a state legalizes recreational marijuana, the impact is not confined to its own borders. That’s the implication of a new NBER study from the economists Zhuang Hao and Benjamin Cowan, which found that since Colorado and Washington set up legal markets for the drug in 2013, it has been finding its way to neighboring states in greater quantities:

We find that [recreational marijuana legalization] causes a sharp increase in marijuana possession arrests of border counties relative to non-border counties in both the Colorado and Washington regions. If a county shares a physical border with an RML state, it experiences an increase in marijuana possession arrests of roughly 30% following RML implementation (relative to non-border counties in the same region).

The authors note that one common argument for marijuana legalization is fiscal: States may be able to increase revenues by taxing the drug and save money on police and prisons by decriminalizing it. But this paper suggests that some of the cost savings in states with legal marijuana may come at the expense of other states, which have to manage increased drug use, at least in border counties, and which don’t share in the weed tax windfall.

To this concern, drug libertarians might answer, not unfairly: Well, that’s why people should be able to legally buy marijuana in every state. And we might indeed be going in that direction. But for now, most states still have some form of criminal penalty for the sale of marijuana, and the federal ban is still on the books.

Jeff Sessions’ fantasy of a return to 20th-century Drug War policies would almost certainly do more harm than good. But insofar as statewide marijuana legalizations place a significant burden on other states, there is a case for the federal government to err on the side of restriction and use some of the legal means at its disposal to curb the proliferation of cheap pot.

OPEC Doubles Down on its Losing Hand

The oil cartel OPEC and a collection of ten other petrostates recommitted themselves to a plan to cut production this week. The FT reports:

The agreement hammered out in Vienna on Thursday will see the 1.8m barrel a day cuts, first agreed in November, extended to the end of the first quarter of 2018. Russia and other non-Opec countries have signed up to the deal, Suhail al Mazrouei, the oil minister for the United Arab Emirates, told the Financial Times. “Everyone is in agreement,” he said.

These petrostates decided on a production cut last November that would last through the first six months of 2017, and this new extension, agreed upon in Vienna during OPEC’s semiannual meeting, will require those limits on output to continue another nine months, through March of next year.

But if the goal of this market intervention was to reduce an oversupply and set off a price rebound, why has Brent crude fallen nearly 5 percent in trading since the announcement? The WSJ has an idea:

A longer period of the same level of production disappointed investors in part because of the widely held expectation that U.S. shale will continue to ramp up, keeping supply high and dampening prices. […]

That means U.S. shale may emerge as the deal’s biggest beneficiary, a reality that highlights the pressure on the two massive players, Saudi Arabia and Russia, to extend their output agreement—even though so far it hasn’t significantly lifted prices or drained a global oversupply of petroleum.

This won’t come as a surprise to our regular readers. We’ve been making the case for many months now that the biggest beneficiary of this production cut agreement hasn’t been its organizers, but the upstart competitors that necessitated it: American shale companies. While these oil regimes have wrung their hands about the falling price of oil and plotted ways to make the commodity more expensive, these U.S. firms have worked on bringing their operating costs down to a level that would allow them to compete in this new low-cost reality. And they’ve succeeded.

This production cut extension was predictable because OPEC & co. have no other cards to play at this point. But it won’t be an effective weapon against shale producers, because the higher crude prices rise as a result of these cuts, the more comfortable U.S. frackers will be.

Something Is Deeply Wrong in the U.S. Intelligence Community

Many high-profile Trump critics, irresponsibly in our view, have been giddily cheering the onslaught of leaks designed to damage the Trump administration.

Reasonable people can debate the merits of leaking in certain circumstances. But the recent unauthorized release by U.S. intelligence services of sensitive information relating to the Manchester bombings has no imaginable justification. As Leonid Bershidsky writes in Bloomberg, it can only be understood as the product of a dangerously arrogant and unaccountable intelligence community:

If … history has taught the U.S. intelligence community anything, it’s that leaking classified information isn’t particularly dangerous and those who do it largely enjoy impunity. Manning spent seven years in prison (though she’d been sentenced to 35), but Snowden, Assange, Petraeus, the unknown Chinese mole, the people who stole the hacking tools and the army of recent anonymous leakers, many of whom probably still work for U.S. intelligence agencies, have escaped any kind of meaningful punishment.

If no one gets punished for leaking, why not give classified information to the media just for fun? The Manchester leaks — the name of the terrorist, which the U.K. authorities hadn’t been able to release, and gory pictures from the scene of the attack — seem to fall into that category. The U.S. intelligence officials who provided that information to reporters had nothing to gain by doing it. They were just bragging they knew stuff.

Trump shares blame for some of the leaks that have pummeled him in the press. The chaos in the White House is the President’s own responsibility; these are his own appointees and confidants singing like canaries to a media eager for dirt.

But the Manchaster situation once again shows that he is not entirely wrong to lash out against a deep state that is out of control, and in this case merely broadcasting information that can only help our enemies—just for the heck of it. Heads should roll, and soon.

Why Trump Shouldn’t Rush to Pop Champagne Corks

With the Middle East in his rearview mirror, President Donald Trump can be reasonably satisfied. The first leg of his international debut passed without major incident—no small feat given Trump’s penchant for improvisation. As an added bonus, the colorful images of his “I Am Not Barack Obama” tour booted less flattering accounts of his presidency from the headlines for a short while.

The locals were no less pleased. Proclaiming their friendship for the United States under banners like Together We Prevail and Even Stronger, Saudis and Israelis pulled out the stops to welcome Trump. They may not have gotten every last thing they hoped for, but that didn’t stop them from celebrating the return of that lovin’ feeling whose loss they mourned bitterly under the previous administration. Trump’s unprecedented visit to the Western Wall—the first by a sitting U.S. President—and his Israel Museum paean to Zionism allayed Israeli disappointment over his expected signature of a waiver shelving (at least for now) the relocation of the American embassy to Jerusalem. And any discomfort caused to Trump’s Saudi hosts by his challenge to confront “the crisis of Islamist extremism” was no doubt offset by the prospect of acquiring $350 billion in U.S. arms over the next ten years.

But from my experience, uplifting rhetoric and memorable optics are the easy part. When it comes to betting on historic breakthroughs in the Middle East, it’s far from true that the (White) House always wins. If history is any guide, it might not be long before everybody reverts back to their default positions, leaving scant reminder of any seeds of optimism. So, aside from Riyadh’s positive contribution to America’s balance of payments, what else can we anticipate?

Iran leads the regional hit parade. Opposition to the regime in Tehran—particularly its nuclear aspirations—remains the catalyst for all the cheerful talk of all the “rare opportunities” that await us. Israel, Saudi Arabia, and its Persian Gulf neighbors couldn’t agree more with Trump’s diagnosis that the Iranians “negotiated a fantastic deal with the last administration” and were heartened by his declaration that “Iran will never have nuclear weapons.”

Critics of President Obama chastised him regularly for confusing soaring speeches with actual policy and action. Now the onus lies on Trump to make good on his promise to block Iran from acquiring nuclear arms. Just last week, in compliance with the very deal he scorned, Trump suspended sanctions against Iran. In parallel, new U.S. Treasury designations targeted persons and entities involved in Iran’s ballistic missile program, and the State Department issued its semi-annual dossier on human rights abuses in the country. Secretary of State Rex Tillerson confirmed in April that the administration is conducting an “interagency review” of the Joint Comprehensive Plan of Action, but what happens next is anybody’s guess.

Trump could initiate a new round of crippling sanctions against Iran, but getting a skeptical international community back on board—as it gorges itself on Iranian business contracts and swoons over the reelection of President Hassan Rouhani—may prove impossible. Is Trump prepared to draw that sword he brandished in Saudi Arabia or to support military action by American allies? Or is he forecasting some change of heart that will prompt Iran to unilaterally disavow its hopes of a nuclear option? Time will tell.

On a second front, Trump has turned heads with his zeal to do what he’s repeatedly called the “ultimate deal” between Israel and the Palestinians within the next year. Talking up his interest in reconciling the two sides, and even invoking the name of Saudi King Salman as one who “would love to see peace” between them, Trump pledged a “renewed effort” to broker an agreement. His senior advisor, son-in-law Jared Kushner, has been put in charge of the portfolio and his envoy, former Trump Organization Executive Vice President Jason Greenblatt, has been traversing the region and winning praise for engaging thoughtfully with all relevant constituencies.

Whether Israelis and Palestinians trust that Trump is sincere or whether they just fear the wrath of a scorned President is unclear. The answer is probably a bit of both. For now, however, they appear to be along for the ride, fearful of being blamed for the failure of any process. But their fundamental positions have undergone little transformation and there’s little reason to believe that Israel’s maximum offer will suddenly placate the minimum demands of the Palestinians. Israel has always been reluctant to take risks when it felt that the United States did not have its back, but even the highest level of confidence in America’s friendship offers no guarantee that the Israeli government will step outside its comfort zone. One can be forgiven for wondering if an ambitious Trump can change this dynamic.

A more likely scenario is that Israelis and Palestinians return to bickering over their more parochial concerns and grievances. Prime Minister Benjamin Netanyahu will continue to hammer the Palestinian Authority over its financial compensation of convicted killers and sanctioned incitement against Israelis and Jews. Rejecting President Mahmoud Abbas as a serious partner for peace under these circumstances, Israel will reflexively deflect attention to Iran—a message Trump has already absorbed—and hope to translate Trump’s affirmation of the “unbreakable bond between the United States and the State of Israel” into tangible measures. Abbas will parry by conditioning talks with Israel on his perennial demands for a settlement freeze and the release of Palestinian prisoners from Israeli jails. In other words, business as usual—unless Trump can produce enough aces from up his sleeve.

Finally, resurrecting the proverbial war against terror, Trump broke new semantic ground when he specified “Islamist” extremism and terror as crises requiring intervention. (Delivering his actual remarks, the President appeared to say “Islamic,” but official transcripts now say “Islamist,” and officials stress that the latter was the intended word.) Exhorting attendees of the Arab-Islamic-American Summit to “drive out” the culprits, he struck a raw nerve for the Sunni world which birthed ISIS and the Taliban. Taking up the gauntlet, the Saudis used the backdrop of Trump’s visit to the kingdom to inaugurate the new Global Center for Combating Extremist Ideology, home of the now infamous glowing orb. The pace of progress in its mission remains, however, uncertain.

When it comes to spreading the flames of radicalism, Saudi leaders stand accused of acting as “both the arsonists and the firefighters.” By bankrolling the propagation of Wahhabi Islam around the world, they have been playing with fire. Feeling the heat on their doorstep in places like Syria and Yemen, Sunni monarchs have since resolved to step up their anti-terror game. But even with the advent of the Arab Spring—a misnomer if ever there were one—the dance of reform in the Arab world has been a familiar two steps forward, one step back.

The royals are heavily vested in the current framework, which has kept them ensconced in power, governing societies plagued by stagnation and income inequality. Part of that infrastructure—whether from fealty to religious dictum or out of need to tamp down public agitation—has been the clerical system. If combatting terror now means driving its perpetrators from the mosque, as Trump advised, it remains to be seen how far and how fast his Arab allies are willing to go down this road. The fact that the stakes are high does not ensure his success.

Progress has been elusive in each of these three theaters. Greenblatt is already back in the region meeting with Israelis and Palestinians, but plenty of spoilers are already laying plans to derail Trump’s vision. An even bigger wild card is Trump himself. Once he gets back to Washington, his Middle East junket will start to seem like a distant memory. Does he possess the gravitas, capability, commitment, creativity, and political bandwidth to see through what he launched? If he doesn’t, no measure of good intention will get him across the finish line.

Trump Launches First FONOP in South China Sea

For the first time since President Trump took office, the U.S. Navy has conducted a freedom-of-navigation operation in the South China Sea, provoking a predictable protest from Beijing. Reuters:

A U.S. Navy warship sailed within 12 nautical miles of an artificial island built up by China in the South China Sea, U.S. officials said on Wednesday, the first such challenge to Beijing in the strategic waterway since U.S. President Donald Trump took office.

The officials, speaking on condition of anonymity, said the USS Dewey traveled close to the Mischief Reef in the Spratly Islands, among a string of islets, reefs and shoals over which China has territorial disputes with its neighbors.

China said its warships had warned the U.S. ship and it lodged “stern representations” with the United States. China said it remained resolutely opposed to so-called freedom of navigation operations.

This patrol has been a long time coming. Along with others, we have been wondering whether the Trump administration had so far declined to approve FONOPs in a gambit to solicit China’s cooperation on North Korea. If that logic indeed held sway early on, it seems that the administration has now changed its tune, rightfully recognizing that going easy on China in one dispute won’t guarantee its cooperation on another.

The exercise also sends an important signal in its own right that the U.S. refuses to recognize China’s claims, and that it will not remain passive as Beijing seeks to expand its maritime reach. That message comes none too soon, as China has lately been working out bilateral deals with its rival claimants while the U.S. has appeared missing in action. Let’s hope this is not a one-off but the start of a more active and engaged phase of the Trump administration’s South China Sea policy.

More, please.

NATO Without America?

A palpable sigh of relief emanated from NATO’s headquarters in Brussels and the capitals of 27 NATO members when Donald Trump finally had a good word to say about history’s most successful and enduring alliance. He did not, of course, go so far as to acknowledge NATO’s genuine achievements: agreeing in 1949 that an attack on any allied state would be considered an attack on all; creating in 1950 a structure of military commands that facilitates operations and creates a common strategic culture among members’ militaries; integrating West Germany as a military power into a cooperative framework in 1954; holding at bay bristling Soviet aggression for 45 years and Russian revanchism since; voluntarily sharing the burdens of a common defense—including nuclear weapons responsibilities; using America as a counterweight to potentially ruinous intra-European competition; reunifying Germany in 1991 without setting off alarms among European countries and Russia; imposing an end to the Balkan wars in 1995 and keeping the still-hostile parties from shooting at each other since; expanding the perimeter of security that encourages prosperity and accountable governance to Eastern and Southern Europe; preventing the Qaddafi regime from carrying out its apparent plan to massacre Libyans in March 2011; fighting for 15 years in Afghanistan; and continually finding ways to adapt a Cold War institution to new security challenges.

But at least President Trump finally acknowledged that NATO is not obsolete, and has important counter-terrorism work underway. While meeting with NATO Secretary General Jens Stoltenberg on April 12 the President ludicrously took credit for those developments, claiming they were in response to his leadership. Secretary General Stoltenberg, a model of diplomatic restraint, allowed the fiction to stand in order to pocket the progress. It was a welcome change from what the truculent American President had recently told the Financial Times: “Alliances have not always worked out very well for us. But I do believe in alliances.” U.S. allies are now beginning to hope that the scorn with which President Trump looks upon their contributions is attenuating.

President Trump is certainly ruder than previous American leaders have been in decrying the shortfalls of our European allies, but the aggravation has long been widespread and is still growing. Americans of all political stripes believe it is long past time for Europe to stop indulging in post-Cold War defense cuts. Every American President of the past thirty years—actually longer, for the plaint goes back to the early years of the Nixon Administration—has dreamt up a NATO initiative to cajole greater defense expenditures out of our European allies. Defense Secretary Robert Gates’s dire warning in 2011 that American patience was wearing thin went largely unheeded; the European reaction to Secretaries Mattis and Tillerson’s messages that the time has come to meet the 2 percent spending obligation has been “How dare they?” not “How dare we?” As this round of dispute rumbles forward, it is sure to seize on the fact that the obligation undertaken at the 2014 Wales NATO summit is only to “aim to move towards the 2% guideline within a decade.” There is technically no obligation to actually meet the requirement by 2024. 

Why, then, does the United States expend so much time and effort on its European allies?

The Free-Rider Problem

The leaders of the North Atlantic Alliance will meet in Brussels on May 25, hoping to continue the education of a President seemingly impervious to its importance. Rightly skeptical that President Trump would sit still for speeches by other heads of government (even President Obama would read on his iPad or leave the U.S. Ambassador to NATO in the American place at the table and slink out), and fearful that he will further undercut Europe’s security by ventilating his ambivalence about the organization, the North Atlantic Council is considering taking the real-estate developer on a tour of its new headquarters instead.

This is likely to be a disaster. Coming in over time and over budget, the headquarters cost $1.3 billion, 22 percent of which was paid for by the United States, a proportion ostensibly based on the distribution of allied wealth but that has remained roughly the same since 1952.1 Even UN dues have been adjusted to reflect reality since then. The building is likelier to become an example of European profligacy with which the President regales his crowds. One can see the tweet taking shape: “Bloated Europe wastes billions on bad real estate deal! Won’t spend on military! Bring our troops home!”

During his campaign, Donald Trump fulsomely criticized America’s NATO allies for fleecing us, expecting the United States to provide for their security while they manipulate their currencies and set trade rules detrimental to America’s prosperity. Candidate Trump routinely argued that NATO was a Cold War relic, needlessly provoking Russia by expanding its membership and neglectful of the true problem of terrorism. President Trump continued the fusillade, relentlessly reiterating that NATO allies are failing to meet their obligation to spend 2 percent of gross domestic product on defense. The day after meeting with German Chancellor Angela Merkel, he tweeted that Germany “owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!”

Most of NATO’s American advocates (me included) have responded by reiterating time-honored, misty-eyed encomia about Transatlantic solidarity, emphasizing that the only time NATO’s mutual defense clause was invoked was by European and Canadian governments in solidarity with us after the September 11 attacks. Those arguments have fallen on deaf ears, because, as with many of the President’s outlandish claims, there is a kernel of truth to his excoriation. NATO allies do rely too heavily on American military power when it is well within their ability to provide for themselves. NATO allies should meet the obligation freely undertaken at the 2014 summit to spend 2 percent of GDP on defense. Touching as the show of solidarity after September 11 was, Canada was the only ally whose military cooperation was essential, and that cooperation is provided bilaterally through the North American Aerospace Defense agreements. Civilian air traffic control would surely have been provided without NATO fighter and AWACs planes patrolling American skies; intelligence-sharing is mostly done bilaterally or through the Five Eyes consortium.  

And lest we get too sentimental about NATO, recall that the 2001 NATO invocation was the deft handiwork of the British government, part of a broader campaign to show an American administration they feared would act both recklessly and unilaterally the value of institutionalized multilateral cooperation (and Britain’s essential role in securing it). NATO Secretary General George Robertson diplomatically avoided questions about whether the Bush Administration had asked for the invocation of Article 5, brilliantly coercing recalcitrant allies with ominous warnings of an America unconcerned with Europe. 

But even if the support of some allies was grudging, they did nonetheless pledge on September 12 that the attack on us was an attack on them, and offer any and all support the Bush Administration wanted in the unnerving aftermath. That Americans were consumed with doing as quickly as possible all that was needed in those unimagined circumstances in no way diminishes the magnitude of commitment evinced by our allies. 

Robertson’s refrain that NATO is America’s “permanent coalition of choice” rang less true during the 2003 Iraq War. Some allies shared American motivations—Tony Blair famously countered a journalist’s charge that Britain simperingly bowed to the Bush Administration’s arguments by saying “it’s even worse than you fear: I actually believe them.” Some allies new to NATO were startled to find themselves pressed for political support and forces for a fight far afield of their own security. Some allies saw opportunities to advance an anti-American agenda in the Middle East and beyond (France’s condemnation of the war at a UN meeting on terrorism and French President Jacques Chirac’s flirtation with a Francophone bloc as a counterweight to NATO especially stung). Some allies, Germany especially, feared what America was becoming. That we proceeded despite their objections cast a long shadow over alliance relations.

Stessa Spiaggia, Stesso Mare2

Still, the Iraq War cast no longer a shadow than the Vietnam War, which it paralleled in many ways. It cast no longer a shadow than the Mansfield Amendments of the early 1970s, which would have required the removal of U.S. troops from Europe unless NATO allies dramatically increased their defense spending. It cast no longer a shadow than the acrimonious departure of France from NATO’s military command in 1965, or the U.S. refusal to support Britain and France during their military intervention in Egypt in October 1956. It cast no longer a shadow than the dispute over German rearmament in 1954, which saw the most ardently Europeanist President, Dwight Eisenhower, threaten NATO allies with “an agonizing reappraisal” of the American commitment to NATO.  

Indeed, the history of the NATO alliance is one of frequent mutual disappointment. It is also a history of governments realizing they have no better option than to continue wrangling each other into persevering. Fundamentally, Europe cannot be confident in its safety without American assurances. This is less a matter of raw military power and economic prowess than of diplomatic culture. Britain (perhaps decreasingly) and France retain the reflexes of great powers and do not blanch at the use of military force to achieve their political aims—French operations in Mali have proved a salutary model for the limited use of force in support of foreign governments. The forces of Norway, Denmark, and the Netherlands made a good showing in Libya. The Baltic states have upped their game considerably in response to Russian threats both novel (hybrid and cyber warfare) and traditional (intimidation with large-scale military exercises). 

But most European governments conduct their national security policies at a much greater distance from their militaries, celebrating their concentration on “soft power” tools in lieu of force. Not only do they privilege those tools, they often consider their policies, and themselves, morally superior for the choice. One need only listen to EU Commission President Jean-Claude Juncker or read of the European Parliament passing legislation condemning U.S. intelligence agencies to share President Trump’s aggravation with Europe. We sentimentalize the Transatlantic connection at our peril.  

However, NATO’s fundamental bargain continues to be overwhelmingly advantageous to the United States. European states would be both less willing and less able to help us without NATO. European allies would likely spend even less—not more—on defense without the constant hectoring of the United States within NATO. They would likely spend more on military pay and benefits than on high-end weapons and capabilities; all Western militaries must contend with competing demands on their funding, but the problem is more effectively addressed in NATO, where militaries have greater political capital to make hard choices than in solely national or EU forums. They would not be nearly as able to get organized and act decisively for a common purpose when needed. And they would be less likely to feel an obligation to participate in wars that the U.S. military fights beyond Europe. Diplomatically, we would need to negotiate European states into participating in our endeavors rather than expecting them to proffer a good excuse to remain out. That may seem a subtle difference, but it isn’t.

The truth is that the United States would willingly trade the Europeans in for better allies, if only better allies could be found. Australia, yes—a government serious about its security, with a capable, reasonably well-financed, and innovative military, a culturally comfortable political system, and a history of cooperation. But it, too, spends just barely 2 percent of GDP on defense.

Japan pays more in support of American bases and stationed troops than do our European allies, but that checkbook diplomacy must be weighed against its inhibitions about spending more than 1 percent of GDP on its own defense, deploying fighting forces in support of allied operations even in Asia (their defense law has been interpreted to obviate even support of U.S. efforts to defend South Korea), and cooperating militarily with its neighbors. Under Prime Minister Junichiro Koizumi’s leadership a decade ago, Japan made a fundamental realignment, slowly and gently building domestic support for greater defense spending and cooperation, refueling U.S. ships en route to Afghanistan, and sending troops for humanitarian tasks in Iraq (the first international deployment of Japanese troops since 1945). Subsequent Japanese governments have creatively built security linkages, exported defense equipment, and conducted joint military patrols with the forces of the Philippines, Indonesia, Malaysia, and Vietnam. But as useful as it has become, Japan cannot provide a substitute for the direct participation of European allies.

South Korea also has a robust defense budget and a very capable military that has contributed to the wars of the past 15 years, but it remains skittish about cooperating with Japan and is understandably focused on the challenges of the Korean Peninsula (including its own domestic political crises). Rounding out the list of the world’s ten top defense spenders are our adversaries China and Russia; India, which is slowly shifting toward cooperation with the United States because of China’s worrying behavior; Saudi Arabia, Britain, France, and Germany.

The Saudis are often maligned as being as great a threat as al-Qaeda or ISIS. This not only ignores the great changes in Saudi national security policy, especially after the 2005 terrorist attack in Riyadh, but also the important political and social changes enacted under the influence of the Emirates’ successes and a reformist leadership in the Kingdom. America’s partners in the region have gone on a defense-spending spree, driven by concern about Iranian efforts to destabilize Sunni governments and infiltrate Shi‘a ones. Even with those changes, however, impediments to deeper cooperation remain—Hillary Clinton’s trial balloon as Secretary of State about extending nuclear deterrence to Saudi Arabia deflated quickly due to the American public’s hesitant attitudes toward a country so politically and culturally different.  

The possibility certainly exists of strengthening relationships with the countries of the Middle East. Jordan, in particular, has been heroic in its generosity to Syrian refugees and courageous in its policies toward the Assad government. The United Arab Emirates  leads in the development of serious military forces and in cooperating with U.S. operations, as it did in Libya. Jordan, Egypt, and the UAE have been stalwart in their commitment to the war in Afghanistan and are being cajoled into a common front against ISIS. Even so, the countries of the Middle East pose challenges that European allies do not. With regard to Egypt and Turkey in particular, the Trump Administration seems to have averted its eyes from the domestic governance concerns that have inhibited previous administrations and tend to sow the seeds of future internal violence. And these countries contribute vastly less to a range of common defense efforts—anti-piracy to take but one example—than do Europeans. 

Most of America’s capable regional allies around the world have significant limitations in extending operations beyond their immediate regions. Furthermore, their spending levels overall fail to impress. If we rank countries by per capita military spending, Saudi Arabia far outstrips all other states at $6,909; the United States ranks only 4th with $1,859 per person (Singapore and Israel both spend more). Rounding out the top 15 per-person spenders on defense, though, are seven more NATO allies (Norway, Greece, Britain, France, Luxembourg, Denmark, and the Netherlands). Wan as NATO allies’ spending often seems, it still stacks up favorably against other countries’, and NATO allies are unusual in their willingness to engage beyond their region in support of U.S. efforts.

The Logic of Collective Action

It also merits emphasizing that NATO and “Europe” are not the same. Very often when American exasperation boils up at Europeans, it is the European Union we are reacting to. Not only do the EU’s ambitions outpace its achievements, its advocates and officials often seek acclaim in the present for intentions to accomplish things in the future. But while most NATO allies are also in the European Union, they behave differently in each setting because the institutional cultures of the two organizations are markedly different.  

American leadership in NATO creates opportunities that we will never have in other venues. The integrated military command (IMC)  in NATO is the way we go to war, because the NATO allies are the countries we most frequently fight alongside, and the long-practiced procedures of the IMC facilitate understanding. Allies show up using equipment compatible with American equipment, talk on radio frequencies already known to American forces, share intelligence across linked systems, and drop bombs that can be shared if one country’s forces run short. 

General Tommy Franks is said to have complained in the run-up to the Afghanistan war that he didn’t have time to become an expert on the Danish Air Force. That may be as much an admission of his limitations as a reflection of the contribution of the Danish Air Force, because the United States already has an expert on the Danish Air Force: NATO’s senior military commander. The Supreme Allied Commander for Operations (formerly Supreme Allied Commander, Europe) has always been an American. Europeans insist on that, not only because they want a strong Transatlantic connection, but also because very few European commanders have run operations of the breadth and complexity that American commanders routinely do.  

General Franks’s complaint is also characteristic of a time when the American military and even some high-level officials in the Bush Administration arrogantly believed that allies were more hindrance than help—a time of technological dominance and short wars that showcased America’s advantages and investments. Appreciation of allied contributions has increased in proportion to the duration and grimness of the wars we continue to fight. The CENTCOM commander would gladly become an expert on the Danish Air Force now in order to have a supply of allied forces to fight alongside our own.

The U.S. military makes two other complaints about NATO: that member states constrain the use of their forces, and that the pace of collective innovation is slow. Caveats, as they are called in NATO, are the limits that governments place on the participation of their militaries. These typically take the form of more restrictive rules of engagement, such as allowing the air forces only to conduct surveillance and refueling but not drop bombs. In a few extreme instances these restrictions may result in a refusal of a mission or order, as when British General Mike Jackson refused U.S. General Wesley Clark’s direction to prevent Russian troops from taking the Pristina airfield during the Kosovo War.

Frustrating as caveats are, they are legitimate expressions of the political constraints under which governments operate. Which missions forces should engage in, and how great the public tolerance is for casualties suffered in these operations, are constant and valid questions for all elected leaders. Americans often lack perspective about this problem since we ultimately command the forces; if we were placing our troops under foreign command, you can bet Congress would be baying and the administration of the day would be carefully litigating tight restrictions.  

The challenge in every multinational operation is how to marry willingness and ability with needed tasks—and NATO is better at that matchmaking than any other American outfit, because of long practice. Allies have fewer regrets about their participation in NATO operations than about pairing with other American combatant commands (for example, there was a rash of complaints from allies about their treatment by CENTCOM early on in the Afghanistan and Iraq wars).

Synchronizing innovation is the hardest military problem to manage. As with caveats, there is merit on both sides of the argument. NATO’s standardization agreements establish guidelines for equipment and operations that keep allied forces interoperable: how fast networks need to transmit data, specifications for attaching bombs to aircraft wings, what kinds and how much ammunition units have, which signals ships at sea use over which frequencies, what kind of fuel vehicles run on. Most are mundane logistical details, but they are nonetheless essential to managing economies of effort. And because they are known and adhered to by all allies, they simplify any military operation, whether undertaken within NATO or not.

The problem comes when those standardization agreements hold states back from war-winning or life-saving innovations. Countries cannot be expected to forego advances in military technology or operations that would cause them fewer casualties or lower the likelihood of defeat. Yet if guidelines were not established and strictly adhered to, coalition forces would have to segregate their operations geographically, take widely varying levels of casualties, and assume very different levels of risk. Operations would require the greatest risk of the countries least able to bear them. The United States, as the NATO country with the biggest budget, greatest demands, and most widely varied security obligations, tends to be the fastest innovator. European nations often struggle to keep pace, feeling that they no sooner meet a standard than the U.S. military raises it. And the U.S. military complains that Europeans lag in adopting newer, better methods.

For example, the U.S. military developed a geolocator called the “blue force tracker” that could tag friendly vehicles so that everyone on the U.S. net could see associated forces. It dramatically reduced fratricide incidents, but the devices were new to U.S. forces and not yet adopted by allied arsenals at the time of the 2003 Iraq War. The U.S. military couldn’t be expected not to utilize them, but allies rightly understood that they reduced the risk only to U.S. forces. The solution in that instance was for the U.S. military to also tag allies, because the political and human costs of friendly fire incidents are so high. Many such solutions are relatively simple in the near term—loans—but harder in the medium term when allies choose not to adopt new practices or equipment.

There is no enduring solution to these problems: They are inherent in coalition fighting. One of the quietly whispered fears of Europeans over the past 25 years has been that, as America’s wars have shifted from Europe to the Middle East, its military talent has migrated in that direction as well. And so, too, its attention: Several European diplomats mentioned during the Obama Administration that they were almost homesick for the arguments about the EU and defense policy with the Bush Administration, because at least Bush cared enough about the issues to fight over them. Europeans sense an ebbing tide of American expertise on European issues, noticing that the same experts cycle through Europe. “They don’t know us” is the subtext of European concern.

Entre Chien et Loup3

Russian aggression is reviving interest in European security, but not diminishing other claims on American attention. Part of the reason why Trump’s criticism of European defense resonates is that challenges in Europe look manageable with the power Europeans could muster on their own. Could Britain, France, Poland, and Germany really not bring enough power to bear to defeat a Russian invasion of a Baltic state? If not, should they not quickly mobilize greater military forces—or more creatively use the nuclear and conventional forces they already have—instead of relying so heavily on American guarantees? Russia is not the peer of any of those countries (with the possible exception of Poland), much less all of them combined.

This plaint misses an important point. In aggregate, Europe’s military assets look formidable, but only the United States can bring them together in an effective fighting ensemble. We are the mainframe, so to speak, and the allies plug into that—whether we are talking about intelligence, logistics, lift, or half a dozen other crucial functions in contemporary warfighting. However well equipped they look on paper, our allies strain to coordinate their assets without us.

In any event, Americans would be wise not to scorn Europeans for clinging to us when they’re worried. Few states have the ability or domestic support to act without benefit of allies or international institutions. The United States does. But allied support matters for our domestic political purposes as well: Americans are more confident that our government is in the right when we win the support of other states that share our values. It matters especially now, when the international order is fraying. The world looks less safe, and the rules less respected, than they did a decade ago. 

That countries invite us into their problems is one of the great assets of the American-led order. It reinforces our power to be the guarantor of the order, giving us greater influence over the rules that are set. American hegemony has been unique in setting rules that advantage others as well as us—a mutually beneficial outcome that makes sustaining that order  less expensive overall. If we had to impose rules, rather than rely on the attractiveness of our policies, American power would be a much costlier proposition.

Our country has a wider margin of error than most—we can ignore problems that will more quickly overwhelm others. We could choose, as President Trump has often suggested, to define our interests narrowly and leave other states to their fates. But the international order America constructed after World War II is manifestly in our interests. Transatlantic cooperation vividly demonstrates the difference between American power and that of its rivals, because it proves that our methods are different from governments that threaten Europe’s sovereignty and would impose different values.

Europe and the United States constitute a community based on values, not just a military alliance. Indeed, the military alliance would be impossible without shared values—the Eisenhower Administration envisioned NATO-like regional alliances around the world (the South East Asian Treaty Organization comprised of France, Great Britain, New Zealand, Australia, the Philippines, Thailand, and Pakistan; the Central Treaty Organization consisting of Iran, Iraq, Pakistan, Turkey, and the United Kingdom); none but NATO proved sustainable. Americans are leery of committing themselves to states with which they share only interests.

America’s security and prosperity benefit from having allies that share our values and help us advance them throughout the world. Those tiresome allies are our primary advantage over rivals like China. While it was the work of a generation to pull Europe’s perspective beyond its borders, NATO has largely succeeded in that. As a former Norwegian Foreign Minister evangelized, “China is not just rising for the United States; it is rising for Europe, too.” Our NATO allies are important validators of the American-led order and important contributors to its sustainment. We will want their help as challenges grow in the Middle East, Russia corrodes further, and China rises (assuming it actually will). We should take care not to throw those allies overboard until we have better allies to replace them with, and that is highly unlikely to occur any time soon. 

1Carl Ek, “NATO Common Funds Burdensharing: Background and Current Issues” (Congressional Research Service, February 2012); Germany is the next-highest payer at 15 percent.  See “Funding NATO,” North Atlantic Treaty Organization, January 19, 2017. 

2Same beach, same sea (Italian).

3Between dog and wolf (French); descriptive of dusk, when the known world feels wild.

Who Owns Stocks?

American stocks are in the midst of their longest bull market ever, but fewer Americans are sharing in the wealth-creation than would have ten years ago. Because as Gallup reports, stock ownership is down sharply since the financial crisis, especially among the working class and the young.

U.S. stock ownership remains below where it was before the financial crisis in the fall of 2008, with declines since then evident among most major subgroups of the population. Adults aged 65 and older and those with an annual household income of $100,000 or more are two groups whose ownership rates have held firm. […]

Before the 2008 financial crisis, 62% of U.S. adults, on average, said they owned stocks. Since then, the average has been 54%, including lows of 52% in 2013 and 2016. In Gallup’s April 2017 update, 54% of Americans report having money invested in stocks.

To be sure, even Americans who don’t own stocks probably benefit indirectly from the skyrocketing Dow, which has been accompanied by a declining unemployment rate. But overall, the payout from the bull market has been highly uneven; while the wealthy and upper-middle classes have made big gains, the vast middle of the population has a smaller stake in the market than it used to.

Part of this is a problem of wages; if wages were higher, working-class people would have more money to invest. But it’s also a problem of institutions. In the blue model system that prevailed in the industrial age, ordinary peoples’ retirements were taken care of by defined-benefit pension systems. Today, saving and investing for retirement is a more work-intensive enterprise for middle-class people, and our society is still figuring out how to properly align incentives to make sure that everyone who is responsible will have a big enough nest egg.

There are a variety of tax and regulatory steps that might be taken to make it easier for people to put their savings to work, even if they are modest. But perhaps most importantly, our education system should start placing a much bigger emphasis on financial literacy, so that more people—especially young people, whose stock ownership rates have fallen most steeply—know how to make basic investment decisions, like buying into an index fund.

It will always be the case in our financial economy that the rich post the biggest gains from rising stock prices. But in the interests of healthy economic growth and social stability, the share of people who benefit should be widening, not contracting.

Europe’s Decrepit Carbon Market Gets a Grim Prognosis

The European Union’s Emissions Trading System (abbreviated as the EU ETS) is in shambles, and it doesn’t look like there’s enough political will in Brussels to fix it. The carbon market’s problem today is the same one it’s struggled with during its entire 12-year life span: the price for carbon permits is too low to incentivize heavy emitters to change their behavior. And, as Reuters reports, that problem stands to get worse as the scheme’s projected carbon price over the next decade is expected to be significantly lower than was sketched out even one year ago:

Average carbon prices are likely to be almost 9 percent lower than forecast last year, a survey of 135 companies published by the International Emissions Trading Association (IETA) on Wednesday showed.

“Once again IETA members have highlighted the yawning gap between current prices and what’s needed to achieve the Paris objectives,” Jonathan Grant, a director at PwC which carried out the survey, said in a statement. […]

The expected average price is less than half the 40 euros per tonne that respondents said last year is needed to help incentivise investments to help the bloc meet goals set under the Paris Agreement.

Brussels is trying to navigate a dangerous situation here: if it sets its carbon price too high, businesses will close up shop and move elsewhere, bringing their jobs and attendant emissions with them. That phenomenon is known as carbon leakage, and it’s generally considered a worst-case scenario, as it would hurt the European economy without actually reducing global emissions. Conversely, if the EU sets its carbon price too low—the side on which it has erred thus far—then businesses will continue on, well, business as usual.

But the EU ETS’s carbon price hasn’t even come close to that Goldilocks price. Much of the blame for that can be laid at the feet of the 2008 financial crisis—the recession that affected Europe in its aftermath ended up reducing the continent’s emissions in a way that the carbon market’s planners hadn’t accounted for, and even now, nearly a decade later, the bloc hasn’t been able to reduce the number of carbon permits in circulation enough to bump prices up to levels where they’ll actually matter.

It’s a hard sell for politicians to reduce the number of those permits, too, as it will almost certainly result in higher compliance costs for industry. And, as Reuters points out, “two-thirds of respondents to the IETA survey said the rise of populist political movements are a threat to action.” In other words, the prognosis for this ailing green scheme is downright grim.

New Study Suggests We’re Overestimating Coal’s Planet-Wrecking Power

The world doesn’t have nearly as much coal as many analysts have been suggesting, according to a new paper from PhD candidate Justin Ritchie at the University of British Columbia. Though growth in demand for coal may be slowing down—and in the United States actually falling, thanks to cheap and plentiful shale gas—on the supply side of things greens have still found plenty of cause for concern. The dirty energy source is still relatively abundant, and our gloomiest case models for future emissions growth include the complete consumption of the fossil fuel in the coming decades, an unlikely scenario given the way things are going on the demand side but nonetheless a useful piece of our preparation for all potential medium-term futures.

But those extreme coal-use scenarios have been relying on inaccurate data, according to Ritchie. Bloomberg reports:

Inflated coal estimates had become at some point “a virtually unlimited backstop supply [that] has misinformed a generation of long-term energy scenarios,” Ritchie and his co-author, UBC professor Hadi Dowlatabadi, write in their paper. The estimates reflected all geologically identified coal, not the fraction it may be possible to dig out. […]

“For the past quarter-century, high emission baselines have been the focus of research, explicitly or implicitly shaping national policy benchmarks, such as estimates for the social cost of carbon,” the paper says, referring to the dollars-per-ton measure used by government and business to factor future climate damage into today’s spending.

Now, for the necessary caveats: coal still reigns as our worst option for climate friendly energy production, and its consumption still represents a major threat to efforts to stave off potentially catastrophic warming in the coming years.

That said, Ritchie’s research shows that the worst-case scenarios envisioned by the climate scientists of the Intergovernmental Panel on Climate Change (IPCC), widely considered to be the authority on climate change, are using outdated and inaccurate information about the global supply of coal.

The takeaway here shouldn’t be that climate change is somehow less of an immediate problem (it isn’t) or that coal is suddenly not a primary driver of climate change (it still is), but rather that our climate models remain far from reliable. We are constantly hearing of new ways researchers are tinkering with these models as they discover new variables or relationships between variables, or in this case refine the data sets upon which this complex modeling relies.

Climate science is very much a field that studies the future, that studies change (it’s right there in the name, climate change), but there is still so much we don’t know about what’s to come, and about what sorts of changes we’re in for. The basics are well understood at this point—greenhouse gases (GHGs) raise surface temperatures, and industrialization has led to an historic increase in those GHGs—but the “fiddly bits” aren’t yet nailed down, and in many cases don’t even appear to be close to the “settled” position greens promise us climate science has now achieved.