John Glaser and John Mueller
America’s longest war may be coming to an end. Although major obstacles remain, the Trump administration’s negotiations with the Taliban, led by U.S. special envoy Zalmay Khalilzad, have made progress toward an agreement that would include a U.S. military withdrawal. In July, President Trump said “it’s ridiculous” that we’re still in Afghanistan after almost two decades of stalemate. His 2020 Democratic challengers seem to agree — most have called for an end to the war — and fewer and fewer Republicans are willing to defend it.
But one persistent myth continues to frustrate the political momentum to end the war and may inhibit the impending debate over withdrawal. It is by far the most common justification for remaining in Afghanistan: the fear that, if the Taliban takes over the country, the group will let Al Qaeda reestablish a presence there, leaving the terrorist organization to once again plot attacks on the United States.
Experts have effectively contended that, although 9/11 was substantially plotted in Hamburg, Germany, just about the only reason further attacks like that haven’t taken place is that Al Qaeda needs a bigger territorial base of operations — and that such a base will inevitably be in Afghanistan.
Virtually all promoters of the war in Afghanistan have stressed this notion. Barack Obama applied it throughout his presidency. Gen. David H. Petraeus, who commanded American forces in Afghanistan, recently contended that a U.S. withdrawal is still premature and would risk leaving behind a haven for terrorist groups comparable to the rise of Islamic State following the U.S. withdrawal from Iraq in 2011, according to a Wall Street Journal op-ed he co-wrote.
Trump reflected this thinking as well when he authorized an increase of troops to Afghanistan in his first year in office. His “original instinct,” he noted, was “to pull out,” but his advisers had persuaded him to believe that “a hasty withdrawal would create a vacuum that terrorists … would instantly fill, just as happened before” the Sept. 11 attacks.
This key justification for staying in Afghanistan has gone almost entirely unexamined. It fails in several ways.
To begin with, it is unlikely that a triumphal Taliban would invite back Al Qaeda. Its relationship with the terrorist group has been strained since 1996 when Osama bin Laden showed up with his entourage. The Taliban extended hospitality, but insisted on guarantees that Bin Laden refrain from issuing incendiary messages and from engaging in terrorist activities while in the country. He repeatedly agreed and broke his pledge just as frequently. Veteran foreign correspondent Arnaud de Borchgrave said he was “stunned by the hostility” expressed for Bin Laden during an interview shortly before 9/11 with the top Taliban leader. According to Vahid Brown of the Combating Terrorism Center at West Point, relations between the Taliban and Al Qaeda during this period were “deeply contentious, and threatened by mutual distrust and divergent ambitions.”
Bin Laden’s 9/11 ploy not only shattered the agreement, but brought armed destruction upon his hosts. The last thing the Taliban would want, should it take over Afghanistan, is an active terrorist group continually drawing fire from the outside. Moreover, unlike Al Qaeda, the Taliban has an extremely localized perspective and would be primarily concerned with governing Afghanistan.
In addition, it is not at all clear that Al Qaeda would want to return to a ravaged, impoverished, insecure and factionalized Afghanistan even if it were invited. It’s difficult to see how an Afghan haven would be safer than the one Al Qaeda occupies in neighboring Pakistan.
There is also concern that the small branch of Islamic State in Afghanistan would rise if the Americans withdrew. However, Islamic State has suffered repeated tactical failures, has little to no support from the local population, and the Taliban has actively fought the group on the battlefield in Afghanistan for years, making a Taliban-sponsored safe haven for that group singularly unlikely.
Most importantly, the notion that terrorists need a lot of space and privacy to hatch plots of substantial magnitude in the West has been repeatedly undermined by tragic terrorist attacks in Madrid in 2004, London in 2005, Paris in 2015, and Brussels and Istanbul in 2016. None of the attackers in those incidents operated from a safe haven, nor were their plans coordinated by a group within a safe haven. Al Qaeda Central has not been all that effective since 9/11, but the group’s problems do not stem from failing to have enough territory in which to operate or plan.
Pretending that the Taliban can be defeated, and that an independent and democratic government can be left in its place, is unrealistic. The Taliban may very well make further gains following a U.S. withdrawal, but the myth that territorial safe havens provide great utility to terrorists planning transnational attacks should not continue to justify a war that America cannot win.John Glaser is director of foreign policy studies at the Cato Institute. John Mueller is a political scientist at Ohio State University and a senior fellow at the Cato Institute.
There are economic storm clouds on the horizon, but for now wages are rising, jobs are plentiful, and poverty is falling. Democrats running for president need an economic line of attack, so the solution has been to focus on wealth inequality. Senator Bernie Sanders claims that there has been a “massive transfer of wealth from the middle class to the top one percent.” Senator Elizabeth Warren lambastes America’s “extreme concentration of wealth.” Even the establishment Joe Biden laments, “This wealth gap that exists in the United States of America is so profound now.”
Wealth inequality has risen in recent years, but by far less than the Democrats and many media articles imply. The scarier claims about inequality usually stem from the flawed data created by French economist Thomas Piketty and his colleagues. More careful studies by other economists and the Federal Reserve Board reveal surprisingly modest changes in wealth inequality given the huge revolutions in globalization and technology that have occurred.
Are increases in wealth inequality the awful thing that Democrats claim? It depends on what causes them. Much of the recent modest rise in wealth inequality stems from innovations in our economy that are pulling everyone up. Brian Acton and Jan Koum, for example, built huge multibillion dollar fortunes by creating WhatsApp, which provides free phone service for 1.5 billion users globally.
Sanders and Warren are right to criticize crony capitalism as a cause of wealth inequality. But their big government approaches to social policy would have the opposite effect on wealth inequality than what they may believe.
Acton and Koum’s success may have increased the wealth owned by the top 1 percent, but their product has created massive consumer value as well. Most of the wealthiest Americans are entrepreneurs who have fueled economic growth, which is clear in examining the Forbes 400 list. Wealth created this way is not the zero-sum struggle that Democrats imagine it is.
That is the good news. The bad news is that the government itself generates wealth inequality in at least two ways that make us worse off. First, governments give subsidies, regulatory preferences, and other crony-capitalist benefits to wealthy insiders. In the recent Fat Leonard scandal, for example, Leonard Francis gained hundreds of millions of dollars of government contracts by cozying up to Navy officers and providing them with gifts, prostitutes, and other favors to get them to do his bidding.
The other way that the government fuels wealth inequality is a deeper scandal. The expansion of social programs over the decades has undermined incentives for lower- and middle-income families to save while reducing their ability to save because of higher taxes. Government programs have displaced or “crowded out” wealth-building by all American families but the richest.
Politicians complain loudly about wealth inequality, but their own policies are generating it. This issue receives too little policy attention, but it is profoundly important and reveals the hypocrisy of the political left.
Many Americans have saved little for retirement because Social Security discourages them doing so, as does the heavy 12.4 percent wage tax that funds the program. Economist Martin Feldstein found that every dollar increase in Social Security benefits reduces private savings by about 50 cents.
Social Security accounts for a larger share of retirement income for the non-rich than for the rich, so this crowd-out effect increases wealth inequality. In a simulation model, Jagadeesh Gokhale and Laurence Kotlikoff estimated that Social Security raises the share of overall wealth held by the top 1 percent of wealth holders by about 80 percent. This occurs because the program leaves the non-rich with “proportionately less to save, less reason to save, and a larger share of their old-age resources in a nonbequeathable form.”
A study by Baris Kaymak and Markus Poschke built a model of the U.S. economy to estimate the causes of rising wealth inequality. They found that most of the rise in the top 1 percent share of wealth in recent decades was caused by technological changes and wage dispersion, but the expansion of Social Security and Medicare caused about one-quarter of the increase. They concluded that the “redistributive nature of transfer payments was instrumental in curbing wealth accumulation for income groups outside the top 10% and, consequently, amplified wealth concentration in the U.S.”
More government benefits result in less private wealth, especially for the non-rich. It is not just Social Security and Medicare that displaces private saving, but also unemployment insurance, welfare, and other social spending. Some social programs have “asset tests” that deliberately discourage saving.
Total federal and state social spending as a share of gross domestic product soared from 6.8 percent in 1970 to 14.3 percent in 2018. That increase in handouts occurred over the same period that wealth inequality appears to have increased. Generations of Americans have grown up assuming that the government will take care of them when they are sick, unemployed, and retired, so they put too little money aside for future expenses.
Cross-country studies support these conclusions. A 2015 study by Pirmin Fessler and Martin Schurz examined European data and found that “inequality of wealth is higher in countries with a relatively more developed welfare state … given an increase of welfare state expenditure, wealth inequality measured by standard relative inequality measures, such as the Gini coefficient, will increase.”
A study by Credit Suisse found: “Strong social security programs - good public pensions, free higher education or generous student loans, unemployment and health insurance - can greatly reduce the need for personal financial assets… . This is one explanation for the high level of wealth inequality we identify in Denmark, Norway and Sweden: the top groups continue to accumulate for business and investment purposes, while the middle and lower classes have a less pressing need for personal saving.”
That is why it is absurd for politicians such as Sanders and Warren to decry wealth inequality and then turn around and demand European-style expansions in our social programs. The bigger our welfare state, the more wealth inequality we will have.
The solution is to transition to savings-based social programs. Numerous countries have Social Security systems based on private savings accounts. Chile has unemployment-insurance savings accounts. Martin Feldstein proposed a savings-based approach to Medicare. The assets in such savings accounts would be inheritable, unlike the benefits from current U.S. social programs.
Sanders and Warren are right to criticize crony capitalism as a cause of wealth inequality. But their big government approaches to social policy would have the opposite effect on wealth inequality than what they may believe.Chris Edwards is an economist at the Cato Institute. He recently testified before the House Oversight and Reform Committee about the USPS’s dire financial condition.