The Enterprise Blog

Archive for September, 2010

McDonald’s warned that it might have to drop its health insurance plan for some 30,000 restaurant workers because of new rules imposed by ObamaCare. McDonald’s insurer spends too much money on administrative costs and not enough on health services to fit the federal standard. So in the name of consumer protection, thousands of low-wage hamburger cooks are likely to lose their health insurance starting next year. That’s the genius of healthcare reform: Obama says you can stick with the coverage you have if you like it, but if you’ve already lost it you have nothing to keep. Promise kept!

The problem is that the government is regulating an industry it does not understand. Low-wage workers cannot afford the same kind of health coverage that the average middle-class worker purchases, but many want some insurance. To satisfy that demand, McDonald’s and other major companies (including Home Depot, Disney, and Staples) offer their employees “mini-med” plans that provide limited coverage at low prices. McDonald’s offers their hourly workers—the people you see behind the counter—a basic plan for $13.99 a week that provides a maximum annual benefit of $2,000. For $24.30 a week, the annual benefit jumps to $5,000. Both plans cover doctor visits, prescription drugs, preventive care, and inpatient hospital services up to the annual maximum. McDonald’s says 85 percent of those enrolled in its plans spend less than $5,000 for medical care in a year.

Limited coverage may not be ideal, but it is all that many low-wage workers can afford. But that option may be regulated out of existence. The federal government requires that insurers pay at least 80 or 85 percent of their premiums for health services, depending on how many people are covered by the plan. Limited benefit plans do not meet that standard, not out of malice but out of necessity. Such plans typically cover a transient population, with frequent worker turnover that raises the overall cost of enrollment and administration. Moreover, enrollees do not spend much on claims—undoubtedly because they do not have the time and money to seek medical attention for minor ailments. Is that a reason to stop low-wage workers from buying insurance that they obviously want?

Teachers Don’t Hate America! (and Then There’s the Bad News)

By Jenna Schuette Talbot

September 30, 2010, 5:04 pm

Good news rarely gets its fair play. But here’s a worthwhile gospel according to a new study released today by AEI: teachers don’t hate America!

Although public school teachers are often accused of being left-wing and anti-American, this new survey of over 1,000 high school social studies teachers says otherwise. An impressive 83 percent of teachers report seeing America as a “unique country that stands for something special in the world” (see graph below). This finding parallels a study of the general public which found that 84 percent of respondents see America in the same light.

So what does this mean for our high school students? Well, it likely means they aren’t being taught to view America as a fundamentally flawed country. Instead, 82 percent of their teachers find it important to teach students to “respect and appreciate their country but know its shortcomings.”

schuette1

For those waiting for the bad news, it’s not clear that high schoolers are actually gleaning anything from these well-intentioned teachers.  Regarding key concepts of citizenship, no more than 24 percent of public school teachers express great confidence that most of the students from their high school have learned these concepts before they graduate.  So while our students aren’t learning to disavow America, they may not be learning how to participate, either.

For more on the political breakdown regarding teachers’ views on citizenship, check out my colleague Cheryl Miller’s upcoming blog post.

Jenna M. Schuette is a Jacobs Associate in education policy at AEI.

I haven’t always had the nicest things to say about Secretary of Defense Robert Gates—especially when it comes to managing the defense budget (see my article “The Big Squeeze”). That said, yesterday at Duke University, Secretary Gates gave an extraordinary speech in which he talked about “the state of America’s all-volunteer force, reflecting on its achievements” but also raising a number of troubling issues.

First things first, Gates was not calling for a return to conscription. As he noted, the all-volunteer force has given the country “the best educated, the most capable force this country has ever sent into battle.” And, indeed, it is hard to imagine, he notes, that the country would have been able to undertake the “complex, protracted missions” it has in Iraq and Afghanistan “without the dedication of seasoned professionals who chose to serve—and keep on serving … Going back to compulsory service, in addition to being politically impossible, is highly impracticable given the kinds of technical skills, experience, and attributes needed to be successful on the battlefield in the 21st century.”

Yet, as with any organizational choice, there will be associated costs. In the case of the all-volunteer force, there are costs that are obvious and some that are not. Gates speaks to both.

In the first instance, there is the tremendous stress repeated deployments have put on the families of the men and women of the military. Part of the implied “contract” the country has with the members of the all-volunteer force is that in exchange for serving one’s country and, if necessary, putting one’s life on the line, we will provide them with some “semblance of a normal life.” But given the limited size of America’s ground forces (a point Gates does not raise) and the character of the conflicts we’ve been engaged in and will likely remain engaged in for some years to come, that semblance of normality has largely gone by the wayside. As Gates notes, the consequences “include more anxiety and disruption inflicted on children, increased domestic strife, and a corresponding rising divorce rate, which in the case of the Army enlisted has nearly doubled since the wars began.” In addition, as the force grows older and the nation seeks to keep reenlistment rates high, the all-volunteer force grows increasingly costly. Over the past decade, “the amount of money the military spends on personnel and benefits has nearly doubled.” No one of course would begrudge the benefits service men and women receive but, the reality is, a first-rate all-volunteer force is not cheap.

If Secretary Gates had ended with just those points the speech would have been interesting but not especially noteworthy. What was noteworthy was his willingness to dive into the more subtle, but no less important issue of “the relationship between those in uniform and the wider society they have sworn to protect.” To start, Gates suggests that “for most Americans the wars remain an abstraction.” The fact is, today, less than 1 percent of Americans serve either in the active duty forces or the reserves. Moreover, as he also remarks, fewer and fewer Americans have ties to those who have served in the military. “In 1988 about 40 percent of 18-year-olds had a veteran parent. By 2000 the share had dropped to 18 percent, and is projected to fall below 10 percent in the future.” The familial ties that bind the military to the country are simply growing weaker.

So too the geographical and social ties. As Gates notes, the services focus their recruiting efforts where they are most likely to have success and that, in turn, means fishing in the waters where young men and women are familiar with the military. In turn, that typically means recruiting in areas where there are existing military bases, that is, where someone is likely to have a friend, a former classmate, a father or mother, who is serving or has served in the military. But precisely because of the last two decades worth of base consolidation, this has meant a smaller and smaller footprint from which the military is drawing recruits. For the Army in particular, Gates remarks, this has resulted in its bases largely concentrated in the states of Georgia, Kentucky, Texas, Washington, and North Carolina, leaving large swaths of the country “void,” in Gates words, “of relationships and understanding of the armed forces.”

Similarly, the “national” character of the ROTC program—the principal source for the recruitment of military officers—has also shrunk. In touching on this issue, Gates picks up many of the themes that I and my AEI colleague Cheryl Miller recently wrote about in a Wall Street Journal op-ed (“The Military Should Mirror the Nation”). Not only have elite colleges and universities kept ROTC programs off their campuses—ignoring their own pre-Vietnam War tradition of providing the military with class after class of military officers—so too has the military virtually dropped out of many major metropolitan areas to the detriment of its ability to recruit from a diverse and talented segment of America’s youth.  As Gates points out, “the state of Alabama, with a population of less than 5 million, has 10 Army ROTC host programs … the Chicago metro area, population 9 million, has 3.” Left unstated, but certainly true, is that this is the military’s self-inflicted wound. If not addressed, over time, this is bound to have a less than salutary impact on the relationship of the military with the larger American society.

If I have any bone to pick with Gates it’s that he could have been more forward-leaning in saying what he might do to fix the problems. He is the Secretary of Defense, after all. It is well within his power to fix the ROTC’s geographic problem, to argue for an increase in America’s ground forces to relieve the pressures of rotation on service men and women and their families, and to use his good reputation to increase public pressure on the faculties and administrations of the nation’s elite schools to let ROTC back on campus. Gates has raised a number of serious issues; what we need now are serious efforts to address them.

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nfl2About a year ago on the Enterprise Blog, I compared the income distribution for players in the National Football League (NFL) to the income distribution for the entire U.S. population in 2008. Now that data are available for 2009, we can revisit the comparison.

According to a new report from the Census Bureau, the top 20 percent of American households earned 50.3 percent of the total income in 2009, just slightly higher than the 50.0 percent share of income for the top fifth of households in 2008. Looking at a longer period of time, going back to 1967 when the top quintile earned 43.6 percent of all income, the share of income going to the top fifth increased throughout the 1970s and 1980s, until stabilizing in the 49–50 percent range in the mid-1990s.

Using NFL salary data from USA Today, the shares of total team payrolls going to the highest-paid 20 percent of players in 2000 and 2009 are displayed in the chart below for all 32 teams. The average share of NFL payrolls going to the highest-paid 20 percent of players in 2009 was 62.4 percent, higher than the 59.5 percent share in 2008, and much higher than the 56.3 percent in 2000.

nfl

In other words, there is significantly greater income inequality in the NFL than in the general U.S. population, with 62.4 percent of team payrolls going to the top fifth of NFL players in 2009, compared to 50.3 percent of total national income going the top quintile of American households. And while the share of income going to the top 20 percent of U.S. households has been constant for more than a decade, payroll inequality in the NFL keeps increasing each year.

What lessons can we learn from the escalating income inequality in the NFL?

Rising income inequality in the NFL has not come at the expense of either the lowest-paid or the median-paid players. The minimum NFL salary increased by almost 29 percent between 2000 and 2009 in real dollars, and the median inflation-adjusted NFL salary increased by 41 percent during that period. Therefore, despite rising income inequality in the NFL, all players (the lowest-paid players, players earning the median salary, and those earning the highest salaries) were better off in 2009 than in any previous year. In the NFL, the highest-paid “rich” players get richer, and the lowest-paid “poor” players also get richer.

Likewise, Americans in all income groups are generally better off today than previous generations, even though income inequality has increased over time. During the 1967 to 2009 period when the share of income going to the highest-paid 20 percent of American households increased from 43.6 percent to 50.3 percent, real median household income increased by 19 percent, and the average real income for the bottom quintile increased by 28.6 percent.

As I pointed out last year, the main lesson from the NFL is that rising income inequality over time, whether for professional sports or society as a whole, is a natural and expected outcome of competitive labor markets and the expanded opportunities that come from larger and increasingly competitive global markets. The competitive forces that lead to greater income inequality in both the NFL and the overall economy also help to make all NFL players and all Americans better off over time, just not at exactly the same rate.

Image by Mr. Usagi.

indiaSometimes only Bob Woodward can confirm what everyone else suspects. In this case, it has to do with Pakistan’s army chief, General Ashfaq Kayani. In Woodward’s latest book, he reveals evidence—in Kayani’s own words—that, indeed, the general approaches his job with an “India-centric” bias.

Let’s connect the dots. First, India and Pakistan almost reached a deal on the Kashmir issue in 2007 until domestic unrest emerged in the country and, according to what one former Indian diplomat told me, Kayani intervened to stop the deal. Second, Pakistan continues to claim that it is equally a victim of terrorism as the West, yet Lashkar-e-Taiba and Harakat-ul-Jihad al-Islami—the terrorist groups with their eyes on India—continue to operate within the country with support from the Pakistani military.

We also see in the book a warning by Brookings Institution Senior Fellow Bruce Riedel, who told Gen. James Jones, Defense Secretary Bob Gates, and Adm. Mike Mullen that Kayani “is either not in control of his organization or he is not telling the truth.” Then, he said, “My impression is that he falls into the second category.”

If the cancer is indeed in Pakistan, as President Obama has claimed, then we should look more clearly for the source that helps it metastasize. As Obama visits India this November, the Indo-Pak dispute over Kashmir and the two-year anniversary of the Mumbai attacks will loom large as well. Across the border, there will be a general with a service extension to 2013 and a smoking gun. Perhaps Obama will be able to connect the dots too?

Apoorva Shah is a research fellow at AEI.

Image by U.S. Navy.

Nick Schulz

Why No Job Growth in Silicon Valley?

By Nick Schulz

September 30, 2010, 9:53 am

silicon-valleyArnold Kling has an interesting post about whether or not corporations should threaten to exit jurisdictions and relocate to places with a more favorable tax and regulatory climate. It is often difficult for firms to move headquarters because the costs are high and might outweigh the benefits. As Kling notes, however, the effect of imprudent tax and regulatory policies manifests itself in all sorts of ways. Kling writes:

Within the U.S., there is some evidence that economic activity has shifted away from business-hostile “blue” states to business-friendly “red” states. To the extent that this is true, it does not seem to have caused politicians in blue states to switch colors.

In other words, businesses may not relocate their HQs but they expand in different states. This point was hammered home during a two-day conference sponsored by the National Chamber Foundation in Ojai, California. The speakers included Joel Kotkin of Chapman University, Delore Zimmerman of Praxis Strategy Group, Ross DeVol of the Milken Institute, and Jonathan Williams of ALEC.

Kotkin pointed out that as innovative and growth-oriented as Silicon Valley has continued to be over the past decade, job growth in the Valley has flatlined. Firms keep their HQs there, but they grow rapidly in other states that are friendlier to scaling their enterprises. And so Google, Intel, Cisco, and other Valley firms locate new plants in states such as Arizona, Utah, Texas, Virginia, or North Dakota.

The Enterprising States study conducted by Kotkin and Zimmerman has lots of data that’s worth mining on this dynamic, and the work of DeVol and Williams is well worth consulting, too. Many states are shooting themselves in the foot with policies that prompt wealth and job creators to expand in different jurisdictions. Mark Perry notes that several firms in California are expanding rapidly in other states due to labor and other regulations.

Image by Mboverload.

You know you’ve been in Washington too long when you start writing stuff like: “A circular firing squad is always fun to watch.”

The line between cocktail hour quips and analysis is often gossamer thin, and blogging makes us all a little desperate for material. Nonetheless, it’s sad when someone like Gordon Adams, once associate director for national security at the Office of Management and Budget (OMB), opts for name-calling rather than number-crunching as he does in a “critique” of the arguments we, “flame carriers of the neoconservative vision”—whatever that means—advanced in last Friday’s Washington Post. Gordon got a biscuit, too, from Andrew Sullivan, who is ever vigilant at the “AEI Propaganda Watch.”

Rather than simply join the purse fight, let us try to enlighten you, Dear Readers. Our Post piece urged conservatives to remember that the original sin of government is not to grow, but to do things it shouldn’t do—and that protecting the nation and its interests is indeed the first order of business for government and a function that only the national government can perform.

This is not an argument that the Left or Democrats want to have. To begin with, most Americans have a high regard both for the utility of military power and, especially in a time of war where so few of us actually serve, a strong disposition to give those who defend us everything they might need. So making a principled argument about the futility or sorrows of U.S. power doesn’t resonate much outside the faculty lounge. Thus, the Obama administration has reluctantly agreed that the Iraq surge, for example, was a good thing.

But never letting a good crisis go to waste, the Left saw a golden opportunity in the recession to go after military spending. The fundamental argument has been that, while American military power is good (“No! Really! We believe it!”) we just can’t afford it. President Obama would really like to succeed in Afghanistan—after all, it’s the “good war”—but when confronted with an OMB assessment that a strategically sound approach would cost $889 billion over ten years, blanched at the “opportunity costs.” That is to say, the cost to his domestic programs and priorities. “It’s not in the national interest,” the commander-in-chief told Bob Woodward.

Woodward also recounts how President Obama thinks he’s channeling an inner Eisenhower and his storied “military-industrial complex” speech, the conclusion of which was that “each [government] proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs.” Eisenhower’s concern was to constrain the seemingly open-ended military commitment in Korea, which was consuming 14 percent of U.S. economic output. The point of the “balance” he achieved lowered the slice consumed by defense spending to 10 percent of GDP. That math sounds pretty good to a neocon flame carrier.

What Eisenhower did not have to contend with were federal deficits at more than 10 percent of GDP, an accumulated national debt (and associated interest payments) headed toward 90 percent of GDP, and social entitlements (before ObamaCare) nearing 15 percent of GDP. With defense spending, including war costs, currently less than 5 percent of GDP, it’s pretty obvious where any real “balancing” must come from. Indeed, entitlement reform is critical to ensuring that the United States can preserve its strength and finance its wars.

Thus our Post piece was essentially an argument about affordability, balance, and opportunity costs. Even more, we were making an argument about value. It’s very difficult to quantify, in economic or other terms, the value of U.S. security guarantees not only for America but for the rest of the world. Yet it’s evident that our prosperity—and hopes for future growth—would be jeopardized without them.

Gordon Adams thinks we have twisted the facts, but we don’t dispute that the cost of national defense has risen. So has the cost of a car. There are lots of facts out there, but only some of them are relevant to whether the United States can preserve sufficient military strength.

Cross-posted at CDS.

Danielle Pletka is vice president for foreign and defense policy studies at AEI, where Thomas Donnelly directs the Center for Defense Studies.

fox-and-troopsIn a private letter to Prime Minister David Cameron, delivered to 10 Downing Street on the eve of yesterday’s meeting of Britain’s National Security Council, Defense Minister Liam Fox warns the prime minister that “draconian” cuts to the national defense account in a time of war could have “grave political consequences” for the government. The dramatic scale of the planned reductions will “seriously damage morale across the Armed Forces” and will come at a time of “major challenge (and, in all probability, significant casualties) in Afghanistan”:

Frankly, this process is looking less and less defensible as a proper SDSR (Strategic Defence and Strategy Review) and more like a “super CSR” (Comprehensive Spending Review). If it continues on its current trajectory it is likely to have grave political consequences for us, destroying much of the reputation and capital you, and we, have built up in recent years.

George Osborne, the Chancellor of the Exchequer at the Treasury, expects the Ministry of Defense to contribute 10 percent of its annual $60 billion budget to help realize the savings foreseen in the government’s national austerity program—with further cuts likely to come next year and the year after. All departments, Osborne has said on numerous occasions, are to contribute their share to help salvage the dire state of Britain’s finances—war or no war.

Despite strenuous efforts by those Ministry of Defense officials responsible for drafting the SDSR and satisfying the Treasury’s demands, Fox says in his letter that bridging the gap between Britain’s desired strategic ends and the resources available to realize them is “financially and intellectually virtually impossible.” Earlier this month, the members of the NSC received a document that spelled out what the cuts would probably mean: force reductions of tens of thousands of military personnel across all three services, loss of fighters and new surveillance aircraft, delays if not outright cancellation of new aircraft carriers, and questions about when, if ever, Britain’s aging Trident nuclear submarines would be replaced. The proposed cuts, Fox writes, will “limit severely the options available to this and all future governments.” If implemented, Britain will no longer be militarily capable of performing the multitude of tasks and operations it performs today.

Concerned by Fox’s list of cutbacks, the other principals at yesterday’s NSC meeting reportedly asked the defense minister for more analysis on the impact of the proposed reductions on the armed forces. And while Prime Minister Cameron stated at yesterday’s meeting that his government’s planned defense cuts will not affect Britain’s current operations in Afghanistan, it is clear that a decisive fork in the road has been reached when it comes the future of British defenses. If nothing else, Fox’s letter will force the government to face up to the consequence of its decisions on the defense budget.

The previous Labour governments may have driven the car into the ditch by underfunding defense at the expense of domestic programs, but the question now is whether the Tories will pull the car out of the ditch and repair it, or just walk away, thinking they can always hitch a ride if necessary with the United States or the European Union.

Gary Schmitt is a resident scholar at AEI, where Philipp Tomio is a research assistant.

Image by ldc stl.

Boehner on Reforming Congress

By The Editors

September 29, 2010, 12:38 pm

Tomorrow at 2 p.m., House Minority Leader John Boehner (R-Ohio) will make an address at AEI to outline his vision of the reform needed to address the past failures of both Democrats and Republicans. Watch the livestream here during the event and find more information here.

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The House of Representatives is set to vote this week on H.R. 2378, the “Currency Reform for Fair Trade Act.” This was one of a number of options for getting tough with China over its exchange rate. I’ve written elsewhere about why other approaches were preferable. But this is the one that caught the fancy of the leaders of the House. They were drawn by dubious promises that effective action on currency could create 500,000 U.S. jobs.

The bill would attempt this by altering the way in which companies can get tariffs to offset foreign subsidies. It would allow the Department of Commerce to treat an undervalued currency as a subsidy that could be offset. What impact would that have?

There things get tricky. This whole realm of offsetting tariffs—known as “countervailing duties” or CVDs—is full of mysteries known only to well-compensated trade lawyers. The House bill itself has gone through changes to make it fit with global trade rules. Those changes affect key provisions like whether Commerce must do something, or whether Commerce may do something. How can one parse all this to see what it means? The Congressional Budget Office can! That’s their job—to look at impenetrable or improbable pieces of legislation, take them seriously, and cost them out impartially. That’s what they just did on the China bill. They were not asked to figure out how many American jobs it would produce; they were asked about revenue and cost effects, but those should give us a clue.

How much money would these new tariffs deliver in the next year (fiscal 2011)? CBO says: $0.

So much for an effective and speedy remedy to the recession.

Perhaps it was expecting too much to have a complicated procedural change kick in so soon. What about the year after that, fiscal 2012? CBO says: $5 million.

A little perspective may be helpful here. In 2009, U.S. imports of goods from China were $297 billion. So we’re talking about an average tariff rate change of 0.0017 percent. That’s expected to triple in fiscal 2013, to $15 million in revenue, perhaps 0.005 percent.

Some possible conclusions:

1.    Who cares? This is very unlikely to become law.
2.    Doesn’t look like a recession cure.
3.    Bad policy. It will annoy the Chinese; that’s it.
4.    It’s the least we can do.

Cheryl Miller

Who Will Be the Next David Petraeus?

By Cheryl Miller

September 28, 2010, 4:16 pm

rotcRenny McPherson, a former Marine officer now at Harvard Business School, considers an important challenge for the military in this weekend’s Boston Globe: Why are there so few David Petraeuses?

This isn’t an academic question. As McPherson notes, the demand for innovative and adaptive leadership is greater than ever before (a need also recognized by the 2010 Quadrennial Defense Review) thanks to a shift in war-fighting strategy and tactics:

Over the course of the 20th century, the United States became the dominant world power by advancing the technology of warfare. Now the information revolution, recent conflicts in Iraq and Afghanistan, and global counter-terrorism have shown that an expanded set of skills is required of our top officers. Today we need military leaders who can process the ever-larger amounts of information coming at them and who can communicate more dexterously up, down, and across; they also must be adept at dealing with nonmilitary institutions and quick to learn foreign cultures.

How do we get more officers with the necessary skill sets to succeed? McPherson interviewed “37 top military leaders” to learn what experiences best equipped them for the battlefields of tomorrow.

What’s interesting is that all the queried leaders emphasized experiences that got them outside the military “comfort zone,” whether it be civilian graduate school, study abroad programs, or serving with NATO or at the United Nations. The key here, McPherson writes, is regular interaction “with others who have different values. This does not simply mean fellow service members with dissimilar political views but repeated, regular contact with an array of leaders and everyday citizens from different cultures.”

All these experiences are no doubt valuable, but might there be a cheaper, more readily available alternative closer to home? That’s right—it’s the ROTC. McPherson describes a heightened need for officers with cultural competency, regional knowledge, expertise in conflict resolution, and language and computer skills. Fortunately, America’s universities offer excellent programs in all those areas. And given the diversity of those campuses, ROTC cadets are very used to working with people who hold values different from their own.

The military needs to rethink how it develops future leaders. But in its quest for innovation, it shouldn’t overlook older programs, like the ROTC, that can get the job done.

Cheryl Miller is manager of AEI’s Program on American Citizenship.

Image by Aaron McDowell.

luzhkovThis morning in Russia, President Dmitri Medvedev issued an executive order dismissing Yuri Luzhkov, the man who has served as Moscow’s mayor for the last 18 years. Until today, Luzhkov was recognized as one of Russia’s most powerful and influential public figures, eclipsed only perhaps by President Medvedev and Prime Minister Vladimir Putin. As of today, Luzhkov holds no political office, and speculation has already begun that he will soon face corruption charges in courts that, until a few weeks ago, have delivered him nothing but legal victories for nearly two decades. The Moscow mayor—a titan, a heavyweight, and a fighter—has been ousted by the Kremlin, and it wasn’t Putin’s signature on the order. 

There was no one single reason Medvedev fired Luzhkov. Officially, the president cited a “loss of trust” in the mayor. Last week, Russian Newsweek published a list of various things that would disappear from Moscow once Luzhkov was gone. Among the things to go would be financial favoritism for Inteko, the multibillion-dollar business owned by his wife, Elena Baturina, who is Russia’s richest woman. The magazine also expected an end to the demolition of historical landmarks in Moscow’s downtown center, and even suggested that city authorities would now allow gay rights activists to hold public demonstrations—something the former mayor strictly refused to do, publicly denouncing homosexuals as “satanic.”

Continue reading here.

Image by A. Savin.

North Korea’s much-awaited party conference kicked off in Pyongyang Tuesday with a news release announcing the promotion of Kim Jong Il’s 28-year-old third son, Kim Jong Eun, marking what is undoubtedly a transition to the third generation of family rule in North Korea and a continuation of the country’s military-first policy.

In a surprise move, Kim Jong Il promoted his sister Kim Kyung Hee and Kim Jong Eun to four-star generals in the Korean People’s Army. The military promotions of Kim’s sister—who despite her lack of military experience and general disinterest in politics will serve as regent to the youngest Kim and deputy to Kim Jong Il—and Kim Jong Eun send a clear message that the survival and legitimacy of the Kim family regime depends on the military and not the People’s Party. While the younger Kim will likely be given a civilian post as well, he is first and foremost a member of the military and has begun his transition to Supreme Commander. North Korea will continue to be run as a military-first dictatorship rather than a communist state, offering little hope that the country will pursue policies of reform and opening anytime soon.

Continue reading here.

On Monday, President Obama laudably spoke the plain truth. When asked if he thought his daughters could receive as good an education at a D.C. public school as they are receiving at private Sidwell Friends School, he said, “the answer is no, right now. The D.C. public school systems are struggling.” Exactly right. Good for him for speaking up. Now, it would be nice if he’d more vocally speak up on the behalf of D.C. Public Schools Chancellor Michelle Rhee’s transformative agenda. In the meantime, President Obama should push to renew the D.C. Opportunity Scholarship Fund so that all of D.C.’s families can act in accord with his judgment.

Michael Auslin

China and Japan Face-Off Worsens

By Michael Auslin

September 28, 2010, 11:31 am

The crisis between Japan and China over access to the strategically important Senkaku Islands is far from over. While Japan released the captain of the fishing boat that sparked the row last week, Tokyo is now demanding that China remove fishery patrol boats from the disputed region. These boats are the kind that China used to intimidate an Indonesian navy vessel in August, training its gun on the Indonesians until they released a Chinese fishing boat that was caught illegally in Indonesian waters.

China is upping its pressure on Japan, as well, refusing to release four Japanese construction workers it arrested on suspicion of espionage, and refusing even to meet with Japan’s ambassador to discuss the case. Meanwhile, the ban on rare earth materials to Japan imposed by China is drawing sharp attention not only in Tokyo, but around the world, given that China produces 95 percent of these materials crucial to advanced industrial production.

Now that Japan has released the Chinese captain, China’s actions seem nothing less than punitive, as well as threatening. Beijing is warning Japan in less than subtle terms not to enforce its territorial boundaries, just as it has done so against other nations, including Indonesia and Vietnam.

So far, Washington has stuck by its ally. Assistant Secretary of Defense Chip Gregson stated that Japan acted appropriately in detaining the Chinese ship, but the Obama administration has also repeatedly said this is a problem for the two countries to resolve on their own. Unfortunately, at this moment, China needs to be put on notice that its bullying behavior won’t be tolerated by nations throughout the region. Leaving Japan (or Indonesia or Vietnam) on its own only gives China the confidence to continue its current path. This may not be a turning point, but if China succeeds in intimidating Japan, then its behavior is certain to become more assertive in coming months. I’ll have more to say on this in my Wall Street Journal column on Thursday.

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Karlyn Bowman

Paycheck Unfairness

By Karlyn Bowman

September 28, 2010, 10:25 am

“Discrimination is abhorrent, but the Paycheck Fairness Act is not the right fix.” So says today’s Washington Post editorial on the legislation pending in the Senate. The Post’s editorial echoes some of the objections our colleague Christina Hoff Sommers raised last week in her New York Times op-ed on the bill. Sommers says, “The Paycheck Fairness bill would set women against men, empower trial lawyers and activists, perpetuate falsehoods about the status of women in the workplace and create havoc in a precarious job market. It is 1970s-style gender-war feminism for a society that should be celebrating its success in substantially, if not yet completely, overcoming sex-based workplace discrimination.”

Cheryl Miller

Teachers and the Decline of Civic Knowledge

By Cheryl Miller

September 28, 2010, 9:22 am

Below is a chart from E.D. Hirsch’s must-read lecture on civic education at the Pioneer Institute earlier this year. The chart demonstrates the steep decline of civic knowledge among high school students as measured by the “Nation’s Report Card,” NAEP.

hirsch_civics_table

As Hirsch notes, it’s telling that the civic knowledge of 12th graders (i.e., tomorrow’s voters), has been measured a mere three times since 1970. (The most recent assessment was in 2006, and performance for the upper grades has remained flat.) Given the original purpose of schools—educating young people for citizenship—this indifference is a major abdication of responsibility. Hirsch goes on to remark:

The significant decline of civics knowledge is important not just in itself, but also as an indicator of the general change that was occurring in American schools. Civics is a school subject. If students do not know civics it is mostly because the schools have not taught it to them, a fact that reflects not just irresponsible complacency about the proper function of schools in a democracy, but also the more general anti-intellectual orientation and complacency of the schools towards merely academic subjects. [Emphasis added.]

Reports about student ignorance, while disheartening, are nothing new. Yet there is remarkably little attention paid to what schools are actually teaching students. This omission is all the more striking given the recent research on the critical role teachers play in the classroom. We now know that having a good teacher is more predictive of student achievement than class size or even curriculum design. Teachers are both the key to effective civic education and the missing link in the data.

That’s why the first major report of the AEI Program on American Citizenship is a survey of America’s high school social studies teachers on civic education. The report, “High Schools, Civics, and Citizenship: What Social Studies Teachers Think and Do,” will be released this Thursday, September 30. We expect our findings will both affirm and upset common notions about civics instruction today, and education more generally. But more importantly, we hope our report will serve to remind Americans about the crucial role of civic education in a thriving democracy.

Cheryl Miller is manager of AEI’s Program on American Citizenship.

iraq_operation_3_soldiersLast month I noted here how al Qaeda in Iraq was wooing the Sunni fighters who joined forces with America in 2006 during the surge—using both threats and financial enticements to get these fighters to rejoin the insurgency as the end of America’s combat mission in Iraq approached. Former Sunni Awakening fighters, also known as the Sons of Iraq, complained that the Shia-led Iraqi government was failing to pay them or protect them from retribution from al Qaeda.

Well, this morning, the Washington Post carries troubling news that these fighters are now suffering retribution, not from al Qaeda but from the Iraqi government. In a story entitled “Sunni Awakening officers are kicked off police force in Iraq,” the Post reports:

Hundreds of police officers, formerly members of an American-backed Sunni paramilitary force, will be stripped of their ranks in the Sunni Arab province of Anbar, tribal leaders and Anbar police said Sunday.

The officers called the move by Iraq’s Interior Ministry, which oversees police, a threat to security in Anbar, once a stronghold of Sunni insurgent violence. In 2006, a group called the Awakening, some of them former insurgents, rose up with tribal and U.S. backing to battle al-Qaeda in Iraq. The same strategy was mirrored across the country with American backing and funding, and what became the Sons of Iraq is credited with helping calm Sunni Arab areas.

In 2007, the U.S. military transformed many of the Awakening members in Anbar into police officers. Now many, such as these 410 men, are being stripped of their ranks, are being targeted by al-Qaeda in Iraq or think the Shiite-led government is trying to get rid of them.

“This committee in the Ministry of Interior is sectarian,” said Ahmed Abu Risha, the head of the Awakening and a tribal leader in Anbar. “When you dismiss those who fought al-Qaeda in the streets, this is support for al-Qaeda. What I expect are dire consequences.” …The group of officers demanded that Prime Minister Nouri al-Maliki rescind the order, calling it a “gift offered by the government on a gold platter” to al-Qaeda in Iraq.

This is an extremely troubling development—and yet another reason the U.S. disengagement from Iraq is misguided. If the Iraqi government alienates the Sunni fighters who helped beat back al Qaeda, and drives them into the arms of the insurgency, the progress made under the surge could be lost.

The Post story carries no reaction from the Obama administration to the Iraqi government’s decision, and no indication that the United States is standing up for those who stood with us in the darkest days of the fight in Iraq. Not only could these developments have an adverse impact in Iraq, they could undermine General Petraeus’s efforts to encourage Afghans to turn on the Taliban and join American in the fight against the insurgency there. Why would anyone join us in Afghanistan if they see how poorly those who joined us in Iraq are treated just a few years later?

The White House needs to explain: What, if anything, is the president doing about this? Or has he washed his hands of Iraq entirely?

Image by U.S. Marine Corps.

Our own Dr. Doom, Des Lachman, has a very bleak outlook on the near future of the euro. While the crisis of earlier this year has abated, and European policy makers bought themselves a little bit of time, he thinks collapse will happen and soon.

Des sketched out these thoughts in detail in a recent paper you can find here.

Obama Urges Longer School Day

By Olivia Meeks

September 28, 2010, 6:00 am

schoolIn his interview on “The Today Show” Monday, President Obama called for the nation’s schools to boost student performance and restore national competitiveness by embracing extended learning time. With the United States trailing other industrialized countries in classroom time by at least a month, Obama rightly urged longer school days and a longer school year as ways to help bring students up to speed in the global economy, as well as to mitigate the aggravating effect of summer vacation on the achievement gap.

Save the historically questionable “agrarian calendar” cliché (for interested readers, historian Kenneth Gold has more to say on this urban myth), Obama’s assessment of this outdated system is spot-on. When the summer vacation took shape centuries ago, it was in-line with the cutting-edge education philosophies of the day that warned against overtaxed minds and overheated classrooms in the summer months. However, as AEI’s director of education policy studies Rick Hess argued in the Washington Post, “It’s time to acknowledge that 19th-century school practices may be a poor fit for many of today’s families. It should be much easier for interested families to find schools that operate into or through the summer.” Indeed, while today’s children of the well-off spend their summers at sleep-away camps or in tutoring sessions, music lessons, and the like, their less fortunate peers are often left spending their unstructured and unsupervised vacations vegging out at home.

Continue reading here.

Imag by flickr user visual.dichotomy.

Michael Auslin

Sino-Aussie Naval Cooperation?

By Michael Auslin

September 27, 2010, 3:54 pm

navy-ship1Why is Australia conducting live-fire naval exercises with China in the very region that China warned the United States to stay out of this summer? The Australian officer in charge of the frigate that participated with the PLA Navy said it was an “effective way to build trust and friendship.” Really? Well, China’s recent actions show a propensity to degrade trust and create enmity—it bullied the Indonesian navy in August, when a Chinese fisheries guard vessel trained its gun on a smaller Indonesian craft holding a Chinese fishing boat caught illegally operating in Indonesia’s exclusive economic zone, and it demanded last week that Japan not only apologize for arresting a Chinese captain who operated in Japan’s territorial waters in the Senakaku Islands but that is also pay compensation.

China has claimed the South China Sea as a core national interest, as we’ve repeatedly heard about lately, and is increasing its naval activities, including aerial exercises, in the East China Sea. All the while it refuses repeated requests that it settle territorial disputes in Southeast Asia in an established, transparent, multilateral manner. It would be a shame for one of America’s closest allies, Australia, to now decide to go down the path of paying respect to China’s maritime ambitions in the hopes of influencing its behavior. What the Australians get out of these exercises is difficult to discern. What the Chinese get is clear, as is the message smaller nations in the region receive.

Image by U.S. Navy.

Roger Noriega

Waterloo for Lt. Col. Chavez?

By Roger Noriega

September 27, 2010, 12:52 pm

chavez-dignifiedVenezuela’s democratic opposition leaders say that they have scored a stunning victory in yesterday’s national assembly elections, with their slate of candidates winning a slight majority of the popular votes cast. Because Venezuelan caudillo Hugo Chavez rigged the rules, the opposition’s majority vote would translate into only about 64 of the 165 assembly seats. But that would leave Chavez with no more than 101 seats—less than the super-majority he needs to force through major reforms.

Now comes the crucial test for the opposition, as they mobilize to demand an honest count and “fair” apportionment of the assembly.

Last night’s results left the bombastic Chavez speechless. He skipped his traditional post-election rally from the presidential palace’s “Balcony of the People” because he literally had nothing to say. His handlers gave him draft remarks for four possible scenarios, but none of them anticipated the major defeat in which Chavez failed to win the two-thirds majority.

Chavez is a master of bouncing back from defeat. No doubt, he is huddling with advisors now, deciding whether to risk a showdown by denying the opposition the symbolic majority in the popular vote or by claiming to have won the requisite 110 seats that will allow him to maintain a rubberstamp legislature. The first test will be whether he can bully his cadre of key supporters to back him in such a provocative course. If so, he will have no trouble rallying his supporters to the streets to try to impose phony results. However, they will be met by an ascendant and emboldened opposition that can credibly claim, “We are the majority.”

Chavez may decide that the wiser course of action is to fudge the popular vote count, stealing a narrow majority for his slate of candidates but acknowledging that he has failed to win the two-thirds of the assembly. There is precedent for this sort of response. In the case of recent electoral setbacks, Chavez stole sufficient votes to give himself a “moral victory” and to claim that he is a “democrat.” Then, he recovers by denying his opponents any effective power. For example, in 2008, after conceding the loss of the mayor’s office in Caracas and several key governorships, Chavez proceeded to strip those posts of all resources and power.

What’s an electoral toss-up in Hugo Chavez’s Venezuela? Tails, he wins; heads, you lose.

Moreover, months ago, Chavez laid the legal groundwork for moving more power to “communal councils,” giving him the option of bleeding power from a troublesome national assembly under the guise of empowering the masses.

However, there is no denying that the “Movement for Democratic Unity” has won a significant political victory that only a few enthusiastic backers might have predicted weeks ago. By refusing to boycott the process, the movement’ s leaders put their faith in the Venezuelan people ahead of their fears about Chavez’s electoral shenanigans. And, by proposing a unified national slate of candidates, they denied Chavez the opportunity to split the opposition vote.

Of course, by renewing some confidence in the electoral process, the democratic opposition has raised the stakes for Chavez in the upcoming 2012 presidential votes. One can hope that the opposition will stay unified as he pulls out all the stops to win reelection.

Although U.S. policy makers will take some solace that the opposition has flourished despite being abandoned by Washington, an electoral setback for Chavez does not necessarily spell instant relief for our security interests. Wishful thinking might suggest that Chavez’s trouble at home might clip his wings and force him to retreat from his international adventurism. However, it is just as likely that he will be forced to solidify his ties to the ruthless regimes in Iran, Cuba, China, and Russia that specialize in holding on to power.

At the very least, the U.S. national security establishment must pay greater attention to these growing, troubling relationships and begin to fashion an effective strategy for defending our interests. That is a process that U.S. foreign policy makers can no longer boycott.

Image by Bernardo Londoy.


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