The Deep State (32 page)

On May 22, 2014, on a near–party line vote, the Republican-controlled House of Representatives agreed to an amendment to the defense authorization bill that would ban the Department of Defense from participating in climate research. This vote came despite the department's own judgment in its most recent strategy document, the 2014 Quadrennial Defense Review, that disruptive climate change effects can produce new global instability and complicate the department's missions. The ban
is similar to past edicts that prohibit government-funded institutions like the National Institutes of Health from studying the public health impacts of violence involving firearms.

As obscurantist as these initiatives are, there is probably worse to come at the state level, where school curricula are established (if you think the House of Representatives is bad, that institution resembles the National Academy of Sciences compared to some state legislatures). Already, Louisiana has a law on the books encouraging teachers to teach the (imaginary) controversy about evolution, and several other state legislatures have followed with similar bills. Some other advanced democracies such as the United Kingdom forbid teaching creationism in schools, even private ones, because to them it is not a matter of religious or academic freedom, but rather consumer fraud: they believe it should be illegal to harm minors by systematically impairing their education. Should the type of driving intellectual curiosity that has characterized Tea Party Republicans and their fellow travelers become any more widespread in American society, we can look forward to the sort of rigid, epistemic closure that bans heretical ideas in the same way that Catholic prelates placed an interdict upon Galileo Galilei for teaching the heliocentric model of the solar system.

The Deep State: Evolving Toward Extinction?

The mortal danger of wildfire to a herd of deer is what a half century of disastrous involvement in the Middle East ought to represent to American policy makers. But it does not. Being in favor of the Iraq War may have been objectively wrong, but it was an astute career move for many government operatives and contractors. Wall Street CEOs failed to understand that leveraging their portfolios with derivatives contracts was the equivalent of giving a child a loaded pistol, but with the exception of a handful of people like Richard Fuld, the main Wall Street players are still in their jobs, leveraging up for the next financial bubble.

Nature provides numerous examples of species whose traits have
evolved such that they become maladapted to their environments. The extinct Irish elk's outsized antlers became more of a hindrance to its survival than a benefit: during periods of peak antler growth, the animal experienced osteoporosis. In a similar fashion, the military-industrial complex's pampered, privileged position in society and its cost-is-no-object mentality, along with its rigid and bureaucratized hierarchy, have made it a less effective force in accomplishing its overriding purpose: fighting and winning wars. That goal has become subsidiary to mastering Washington politics, maintaining the cash flow to contractors, and offering senior personnel second careers in industry. These maladaptations affect the quality both of personnel and equipment. This lengthy catalog of dysfunctions in our governing institutions both public and private, and in the elites that control them, points to a system that is not sustainable in the long term. It is also not that unusual in light of history. The normal way mature power structures try to maintain themselves is by redefining their vices as virtues and their mistakes as harmless mulligans that should not be counted on the scorecard. Disasters like Vietnam and Iraq no more undermine the legitimacy of the elites who engineered them, at least in their own eyes, than the sinking of the Spanish Armada undermined Philip II's unshakable belief that he was on the throne by the grace of God. It is the strategy of deny and move on. But it cannot go on.

I am not an advocate for frequent changes in laws and constitutions. But laws and institutions must go hand in hand with the progress of the human mind.

—Thomas Jefferson, letter to Samuel Kercheval, July 12, 1816

Overcoming Our New Gilded Age

There is an alternative strategy to the one habitually employed by great powers in crisis. It was embraced to varying degrees and with differing goals by figures of such contrasting personalities as Mustafa Kemal Atatürk, Franklin D. Roosevelt, Charles de Gaulle, and Deng Xiaoping. They were certainly not revolutionaries by temperament; if anything, their natures were conservative. But they understood that the political cultures in which they operated were fossilized and incapable of adapting to the times. In their drive to reform and modernize the political systems they inherited, their first obstacles to overcome were the outworn myths that encrusted the thinking of the elites.

As the United States confronts its future after experiencing two failed wars, a financial meltdown, and $17 trillion in accumulated debt, the punditry has split into two camps: the first, the declinist camp, sees a broken, dysfunctional political system incapable of reform and an economy soon to be overtaken by China.
New Yorker
writer George Packer is one such voice, who sees our leadership class's breaking of the implicit social compact more than three decades ago as the beginning of a great “unwinding” process that has set the country on a downward trajectory.
1
The other camp, the reformers, offers a profusion of individual nostrums
to turn the nation around: electoral reform, banking reform, military reform, and so on, without any real expectation they will be enacted before the Second Coming. Entrenched interests will fight tooth and nail against such proposals; that is why they are entrenched. But American history has many examples of reform occurring because the public demanded it and would not be silenced.

After the Civil War, the American political system was as locked down as it is now. Corporations owned the state legislatures and got what they wanted. It was during the 1880s, at the height of the Gilded Age, that the courts began accepting the notion of corporate personhood. Railroads could bankrupt farmers with discriminatory freight rates, while oil tycoons like John D. Rockefeller sought to drive every last competitor out of business (the railroads that overcharged the farmer gave steep freight discounts to Rockefeller for the privilege of transporting his oil). Our national economic policy was effectively being run by J. P. Morgan and a handful of his banking cronies. Striking workers were routinely massacred by corporate security guards.

Yet somehow, by dint of sustained agitation by prairie populists and urban progressives alike, conditions began to change. Congress passed the Sherman and Clayton antitrust measures and pure food and drug laws; states began to regulate the conditions of labor; child labor was gradually abolished; some states granted their citizens the power of initiative, referendum, and recall. Women finally received the vote. A couple of decades later, the New Deal completed the agenda with wage and hour laws, collective bargaining rights, banking reform, old age and disability insurance, and several other innovations—and this occurred during the biggest global economic catastrophe of the modern age.

Our forebears have shown that reforming the American political system, while likely to be difficult and protracted (it may take decades to accomplish) is not impossible. The Snowden revelations, whose impact has been surprisingly strong; the derailed drive for military intervention in Syria; a fractious Congress whose dysfunctions have begun to be an inconvenience to the Deep State; and the record level of popular
dissatisfaction with the political status quo all show that there is now a deep but as yet inchoate hunger for change.

What would a platform for political change look like? Many reformers have studied their own pet issue for so long that they have developed a tunnel vision when it comes to the bigger picture. Accordingly, they offer single-issue reforms as a kind of panacea. Those on the Left, like Elizabeth Warren, who have looked long and hard at the financial industry, have begun to sound as if they think it is the source of all our problems, and that breaking up the big banks and implementing some other financial reforms will solve everything. Their view is perhaps more realistic than those on the Right who believe reintroducing the gold standard will cure every ailment from monetary inflation to the heartbreak of psoriasis, but neither one gets to the root of the problem.

We have many creative minds writing persuasively about a variety of American domestic issues, but they tend to see foreign and national security policy as a mysterious black box whose contents they are not qualified to comment on. I experienced this professionally, as colleagues and supervisors tended to regard national defense as something exotic and mysterious. That was fine with me—it reduced micromanagement, as I was the guy who supposedly knew about it—but it occurred to me that they didn't grasp the fact that defense was just one more government program paid for by funds drawn from the Treasury. Defense and domestic policy are intimately related. The business models of the military-industrial complex and the health care complex are identical in essence—their overriding output goal is cost, as third parties—either the taxpayer or the insurer—always foot the bill.

No one can talk about distortions in the American economy such as poor infrastructure or persistent unemployment, or make sense of civil liberties issues here at home, without understanding the high price exacted upon them by America's foreign policy and the national security state. The problems we sow overseas we will reap here, and not just in some metaphorical sense: everything has an opportunity cost, whether it is the dollars extracted from road and bridge repair and funneled into
graft in the Middle East, or the moral and human cost of sending troops to fight and be wounded in protracted wars and offering our police fourteen-ton armored cars in case returning veterans with combat skills go crazy.

Those who decry too-big-to-fail banks often do not understand that they are the price of globalization and our drive to keep the dollar as the world reserve currency despite an eroding domestic industrial base. An explicit rationale for repealing Glass-Steagall was the alleged need for megabanks to compete with overseas institutions. A more tacit rationale was the efficiency of big banks at recycling back into the New York financial market the huge dollar surpluses of the Middle East and East Asia.

To think that one discrete reform will measurably change the system is like imagining that one could paint a pointillist picture from three inches away. One must step back and see the canvas whole, just as one must recognize that our economic system, approach to criminal justice, corporate privileges, and propensity to get into wars are not separate problems. They all spring from a complex of incentives in our system as it exists today. They will all have to be tackled if the country is to reverse the decay of its constitutionally established institutions and the transformation of its once-formidable manufacturing economy into a winner-take-all plutocracy. What follows are reforms that I believe could begin to stop the rot and put the United States back on track.

1.
Eliminate private money from public elections.
This is the first recommendation, because it is the key reform without which none of the other policy changes will happen. We can't afford to nibble around the edges with another McCain-Feingold Act or other marginal changes that can easily be bypassed. The only rational response after decades of ever more arcane laws and regulations and ever more creative evasions is to scrap the whole system and start from square one. We must get money out of our elections—that means
all
private money. Federally funded campaigns will undoubtedly create new problems, but can they be remotely as bad as the auctioning of candidates
that occurs today? With a small, guaranteed sum of money during a limited campaigning season (perhaps from Labor Day until the November election, a generous campaign season compared to election campaigns in the United Kingdom, which last less than a month, or Australia, where they last about six weeks) against an opponent who would get the same amount, but no more, we could finally end the interminable campaign season (which in the House begins the day a new member is sworn in), and incumbents could at last spend time governing rather than going to fund-raisers and dialing for dollars outside their congressional offices.

Public funding would be a cost-effective investment in the long run. Let us bear in mind that a few hundred thousand dollars in bundled contributions led to a $550 million loss to taxpayers in the Solyndra alternative energy case, and a few million dollars in Halliburton contributions led to billions in waste, fraud, and abuse in Iraq. A politician is a hog grateful to whoever is rattling the stick inside the swill bucket. It is time to take the swill bucket away.

2.
Sensibly redeploy and downsize the military and intelligence complex.
Evacuating most of our nearly six hundred overseas bases would save tens of billions of dollars annually. Remember South Korea, where the garrisoning of U.S. troops for sixty years rewarded us with the blessing of the Samsung smartphone? We now have a $20 billion annual trade deficit with South Korea, whose own gross domestic product is roughly one hundred times that of its North Korean rival. Our trade deficit with South Korea is larger in dollars than North Korea's entire economy. It is time for our allies to take up the slack. With somewhat less yawning disparities, the same lopsided economic comparisons apply elsewhere: the European Union has an economy eight times that of Russia, so why does the United States have to make military demonstrations in Poland to impress the Kremlin?

The “stability” that U.S. military power provides is dubious, comes at a high economic cost not borne by those allies who benefit, and could
easily be replaced by slightly greater exertions from the host countries. A military sized to defend legitimate U.S. interests could make economies without losing capability. Indeed, it would gain combat power by jettisoning its gold-plated weapon systems whose intricate design is mainly intended to enrich contractors. The U.S. intelligence complex could also be rightsized to provide higher quality and more objective political intelligence on foreign events (the true purpose of foreign intelligence) rather than abusing U.S. citizens' Fourth Amendment rights. The surveillance state makes a mockery of all the pathetic compensatory braying we hear in some quarters about our being the land of the free and the home of the brave. The CIA must also jettison its legion of contract paramilitary gangs and covert troublemakers, whose activities are not worth the blowback that invariably results—as our last thirty years' experience in the Middle East and South Asia has made painfully evident.

3.
Stay out of the Middle East.
As should be evident from our decades-long fatal embrace of that troubled part of the world, the United States seems to have a reverse Midas touch: virtually everything we have touched has gone badly. Americans have arrogance aplenty, but it is clear they possess neither the intellectual discipline nor the wisdom to micromanage that volatile region. I suspect no one else has: although the British Empire is supposed in some circles to be a model for how to handle world power, the British made an appalling hash of the Middle East during World War I, creating problems that fester still. The time has come for some brave, farsighted American statesman to say, “Enough.”

Our repeated interventions have not assured our security; they have impaired it at ruinous expense and created more enemies than our armed forces can kill. ISIS is undeniably a toxic gang of murderers, but our own disastrous intervention in Iraq formed the petri dish in which its diseased ideology could evolve. These and other failed interventions have necessitated or (more likely) furnished the Deep State with a
convenient rationale for a huge military and an intrusive surveillance system. Protecting energy supplies is no excuse: the invasion of Iraq pulled much of that country's oil production off world markets for years, and the Iranian embargo has not increased world supplies of energy; it has reduced them. In any case, America could develop its own fossil and alternative energy supplies and institute sensible conservation incentives and efficiency standards for a fraction of the cost of our ruinous romance with the Middle East. Any politician, pundit, or academic who advocates American military intervention in the Middle East should be given antipsychotic medication for his or her own good—but mostly for ours.

4.
Redirect the peace dividend to domestic infrastructure improvement.
John Kerry is right—we do act like a poor country. That's because in some respects we are one. Domestic infrastructure of all kinds, not only transportation, but the power grid, public transportation, clean water, sewers, and dams, is increasingly rickety. Even our airports are no longer up to the standards being set by newer facilities like Singapore, Beijing, or Incheon. It is time to sweep aside opposition to building our internal infrastructure that has periodically hobbled this country since its founding: the politicians, now mainly on the Right, who resist infrastructure upgrades bear an uncomfortable resemblance to the antebellum Southern politicians who refused to agree to build canals and railroads. An added benefit of a comprehensive infrastructure program would be the jobs created. A paper titled “The Way Forward: Moving from the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness” by Nouriel Roubini, Daniel Alpert, and Robert Hockett proposes a five-year $1.2 trillion infrastructure investment program designed to create 23,000 jobs for every $1 billion of investment, or 27 million total jobs.

5.
Start enforcing our antitrust laws again.
Since the early 1980s, the doctrine of “efficiency” has trumped all else in judging antitrust cases.
During the George W. Bush administration, the antitrust division of the Justice Department actually argued, with only one exception, on behalf of antitrust defendants, not plaintiffs. It even declined to support the Federal Trade Commission in arguing against monopolistic pharmaceutical patent settlements before the Supreme Court. The Court itself has often taken a strongly anticonsumer line. As a result, price-fixing has become common, as millions of cable subscribers in allocated markets have discovered from their sky-high bills. Market-dominant firms also practice bid rigging when they tender bids for federal, state, and local government contracts. The DOD's encouragement of defense company mergers in the mid-1990s resulted in whole defense sectors in which there is little if any competition. Companies with dominance in a market sector are also in a position to squeeze dependent suppliers and subcontractors into unprofitability, as Wal-mart has done. Conservatives believe in the Jeffersonian doctrine of small government, but forget that Jefferson combined that with an abhorrence of the monopolistic dominance of the corporations of his day, such as the British East India Company or the Hudson's Bay Company.