Friday, December 11, 2009

Afghanistan Troop Surge

The administration's announcement of a troop surge of 30,000 US Military personnel in Afghanistan announced 1n 12/2009 appears to have been designed as an attempt to please both the progressive Democrats who argued for a withdraw of the US military from Afghanistan and the Republicans who argued for a larger surge. Predictably, the announced surge please neither group.

The President's justification for the US presence in Afghanistan was primarily to prevent Al-Qaeda from reorganizing and establishing a base from which attacks on the west could be planned. There are two arguments against this objective even of the US's strategy in Afghanistan is successful which are:
1 - Even if the surge is effective, it is likely that Al-Qaeda would move to another failed state such as Somalia, Sudan or perhaps Yemen.
2 - Arguably, the $100 billion plus per year that will be spent in Afghanistan by the US military alone in pursuit of the military operation would provide more security to the west if even a fraction of this military budget was spent on intelligence and surveillance. Recall that most if not all of the terrorist attacks in the west after 9/11 were executed by local cells that were inspired by but not supported by the Al-Qaeda leadership in Afghanistan. Consequently, if Al-Qaeda in Afghanistan was completely eliminated, the attacks in London, Spain and other locations would have still occurred.

In any case, the military effort is designed to fail in that the goal is to build a government from the top down when in fact the strategy should be to build from the bottom up. The US strategy is to build a central government capability including a central military and police force. Afghanistan has never had an effective central government and is a tribal society with power vested in the village elders. To control the entire country and gain the support of those Afghans in the best position to defeat the radical Taliban and Al-Qaeda, the US needs to work at the village level with the Shuras. The majority of Afghans do not support the radical Taliban or Al-Qaeda but they also view the Karzai government as corrupt and a threat and will never support any force that supports the Karzai government.

In support of the above argument, consider the activities of the Central Asia Institute (CAI) founded by Greg Mortenson which has been built about 200 schools in Afghanistan since 1999. Only 1 of these schools has ever been attacked and when this school was attacked, the village elder organized a militia which went after the Taliban who attacked and killed or jailed the Taliban involved in the attack. CAI only builds a school when invited to do so by the village and the village provides general labor used in the construction and security for the school and staff. CAI provides skilled labor used in the construction, materials, teacher training and school supplies.

For significantly less than the $100 billion annual cost, the US could establish relationships with the villages and build institutions at the village level which would benefit the Afghans and stop the Taliban and Al-Qaeda in Afghanistan.

Monday, December 7, 2009

Healthcare Reform DOA

First, I would like to note that I voted for President Obama and firmly believe that US healt hcare reform needs a major overhaul. At this point, I am forced to conclude that the current health care reform is a complete failure and should not be passed.

The current legislation does nothing to reduce costs and it appears that health care providers are raising costs more than they would have otherwise. It is likely that if the legislation currently passed in the House and Senate passes that the reform will cause more harm than good.

The cost of the proposed reforms in both the House and the Senate are intentionally and significantly understated. The CBO has scored both plans for the 10 years following passage and the CBO actually shows a savings for the Senate plan. However, both plans include 10 years of income and 6 or 7 years of expense in that premium subsidies don't start until 2013 or 2014 for the House and Senate plans, respectively. The cost projections are a financial gimmick intended to sway the general public. Medicare currently faces a financial shortfall and I agree that Medicare reform is necessary to keep the current Medicare system operational. However, any savings in Medicare should be used to shore up Medicare's finances rather than to fund general health care reform. Using Medicare savings to fund the current reform is a bit like a shell game in that additional funds, probably from the government, will be needed to shore up Medicare at some point in the near future.

The mandatory insurance for individuals which will result in 94% of the population being covered by health insurance falls well short of the mark. 6% of the population still equates to over 20 million people who will remain uninsured will still result in significant cost shifts to those who do have insurance.

The process for developing the reform was severely flawed. The administration proudly claims that they have entered into an agreement with the drug makers who will contribute $80b (recent discussions indicate that this amount might increase to $140b) over 10 years to the reform effort. Given that the drug makers have US revenues of about $320b per year and it is likely that the drug makers will just increase costs to makeup for the reduced costs to Medicare recipients, this agreement may actually make costs higher for non-Medicare recipients. Much the same situation exists with the hospitals.

The current proposals for reform should be discarded and congress should start from scratch.