War – A Rationale For Extra-Constitutional Power?
2013-05-11 · Guest: Chris Preble (VP for Defense and Foreign Policy at Cato) · 82:02
War as a political tool to bypass constitutional safeguards
Bob Zadek and guest Chris Preble discuss how the concept of “war” is used by politicians as a narcotic to bypass constitutional safeguards and accumulate power. They explore the implications of the War on Terror, including drone strikes, the killing of American citizens abroad, and the permanence of “security theater” like the TSA. The show concludes with a critique of student loan nationalization and government housing subsidies.
Topics: War on Terror, Constitutional Law, Foreign Policy, Drones, Civil Liberties, TSA, Student Loans, Public Choice, USA PATRIOT Act, AUMF
Speakers: Bob Zadek, Chris Preble, Caller (Mark)
Intro and the Narcotic of War [00:00]
[Music]
Bob Zadek: Welcome to the Bob Zadek Show, heard every Sunday at noon at News 910. Thanks so much for listening. I’m your host, Bob Zadek. We are the leading libertarian talk radio show in the Bay Area and around the country. Indeed, the only weekend live libertarian talk radio show in the country. Thanks so much for listening. Follow us on Facebook, share your views, 800-345-5639. Our operators are standing by. Thanks so much for listening.
As a libertarian, I devote a fair amount of my intellectual life to worrying about individual freedom, economic freedom, personal freedom, civil liberties. For the most part, mainstream libertarian doctrine doesn’t wander much into the area of foreign policy. Indeed, up until today, I don’t think I’ve ever had a show devoted exclusively to foreign policy. Well, it’s time we focused on foreign policy.
My personal freedom does become at risk and imperiled as a result of statutes that are on their face foreign policy focused, defense focused. But like most statutes, they are overbroad. And although I do not consider myself—and indeed almost all of our citizens are not—foreign policy threats, we have statutes that affect all of us, those who are not threats and those who are threats.
And part of the problem is that politicians, particularly those in Washington, have made a very important discovery. They have discovered that once they invoke that three-letter W-word, “war,” once they can declare something to be a war, they are given—and they give themselves—a free pass to do, for the most part, whatever the heck they want to undo most of our cherished constitutional safeguards.
And more importantly, even if the use of the word “war” was appropriate at the time—which it almost never is, putting aside the two World Wars—if it was appropriate at the time, there comes a time that it no longer is appropriate. But no politician, having declared a war—War on Poverty, War on Drugs, War on Immigration, War on Terrorism, War on a noun—whenever they declare a war, no one ever declares the war to be won. Because to do that would be to surrender powers that Washington has accumulated under the cover, the political cover, of war.
And as you will learn today, we live in just such an environment today. We have war measures that were declared wholly inappropriate at the time—the time being around the time of 9/11. Even though the measures were not appropriate then, for sure they’re not appropriate now. Yet there is not the hint of a movement in Washington to declare the war to be won or downgraded or whatever, so that Washington will then surrender the police powers it has accumulated, which they use against all of us. Thus, foreign policy spills right over into domestic policy. And while foreign policy is an important consideration for libertarians as itself, it is doubly important because it spills over to domestic policy.
I’m happy to welcome on the show a gentleman who knows all about this. Chris Preble of the Cato Institute is going to be with us for the whole hour. Chris is Vice President for Defense and Foreign Policy at Cato. He has written three books on foreign policy, 150 articles. He’s appeared all over the mainstream and not-so-mainstream media. He is a frequent guest. Chris has taught history at St. Cloud State University and Temple. He was a US Navy officer and served on board the USS Ticonderoga from 1990 to 1993. Chris, welcome to the show and thanks so much for giving us an hour of your time.
Chris Preble: Hello, Bob. It’s my pleasure.
The Burden of Proof and Post-9/11 Power [05:51]
Bob Zadek: Now, Chris, we are operating right now to some degree almost under a condition of somewhat martial law. And indeed, we witnessed martial law in Boston a couple of weeks ago at the few days surrounding the Boston Marathon bombing. And the President and the executive branch and the federal government in general has skillfully managed to accumulate an awful lot of powers over us, all under the guise of this War on Terror. And also, the same War on Terror has been used as a cover to give the President the power to have American citizens killed without any of the protections in the Constitution, which we will discuss later on in the show. Now, tell us the overview of this accumulation of power and how it affects everybody listening to this show.
Chris Preble: Well, I think the remarkable thing about it is how much this has happened and with much of it has happened with the public’s assent. That is, many Americans, particularly, you know, in the immediate aftermath of the September 11th attacks, were very fearful. They believed that the attacks were merely the first stage in a series of attacks that would be perhaps even more horrific and involve even greater losses of life and destruction of property.
And they therefore allowed the federal government to move into a whole realm of a range of areas in terms of surveillance, in terms of expanded police powers in the state, and they allowed that to go forward. They believed, and some still do, that the steps that were taken by the federal government after September 11th were essential to preventing a subsequent attack. And some would argue that the reason why we haven’t suffered a subsequent attack is because of those measures put in place—things like the Patriot Act and the use of force under the Authorization to Use Military Force (that’s the law that was passed by Congress immediately after 9/11), the wars in Iraq and Afghanistan. I could go down the list.
And my main argument all along has been that the burden of proof does not shift back to the citizens. It should never shift back to the citizens. The burden of proof should always be on the government. If the government believes that these measures are essential, then they need to be able to make that case. They need to be able to demonstrate to the public why these steps are essential to maintaining public safety. And my own research into this question—one of the more recent books I’ve done is something called Terrorizing Ourselves, which is an edited volume studying US counterterrorism policy and the assessment of myself and about a dozen other scholars who contributed to that volume is that, in fact, most of the measures that have been taken by the federal government since 9/11 were not, in fact, essential to defending the United States and some of them may even have been counterproductive to that end.
Defining “Terror” and Motive [09:10]
Bob Zadek: Now, Chris, it’s interesting. You mentioned a key word. A key word. One of the most overused and improperly used words in the public’s discussion today, and that is “terror.” Now, “terror” and “terrorist.” And what was interesting is “terror” is, when you think about it—and I’m not going to be lawyer-like, but the point has to be made—that “terror” is a tactic used for a specific purpose. A terrorist is one who inflicts harm on civilians or on civilian property for the purpose of influencing political decision-making.
It’s an act which is not a free-standing act. In order to qualify as a terrorist act, we have to understand the motive. Thus, recently in the Midwest, there was somebody who was caught with bomb-making equipment. And without knowing anything about that person, because he was making a bomb, he was labeled a terrorist. Now, his motive could have been he was angry, or he was just a bad person, or he had a grudge. And he didn’t care about influencing policy. It didn’t get that far. He just wanted to cause harm. That person using a bomb is not a terrorist.
And the point being that so long as government can continue to use the word “terror” and “terrorist,” they invite Americans to believe we are under terrorist attack and therefore there’s a perfect political cover for everything from TSA to no-fly rights to all of the impositions on our liberties that flow from that political cover. So “terror”—we know so little about even these, the shoe bomber and the underwear bomber and the Christmas Day bomber. we know almost nothing about their motives, but yet they all qualify as terrorists because if the American public believes we are under terrorist attack, then we are sheep and we allow the government to seize away our liberties.
Chris Preble: That’s right. I think, Bob, a couple points. Number one, that someone is a terrorist under our laws if the government says so. And I think that you’re right that we should push back on that a little bit and ask them to be a little more specific. But the real crucial point you make is that motive matters. So we do not confuse horrific attacks of mass killing, like in Newtown or Virginia Tech or in Aurora, Colorado, that have all occurred, you know, within the last few years—we do not confuse those with violence with a political purpose, which is the definition of terrorism.
Those attacks also horrify us, and appropriately so. But they’re attacks by individuals with not a political motive, but simply to, you know, a nihilistic motive, a self-destructive motive in many times, to cause great harm, to cause great suffering. But the additional—the motive, the political motive of the terrorist—is what should differentiate them from mass killing. And I think in a lot of times we’ve lost sight of that. One of the ways we’ve lost sight of that, as you’ve already alluded to, is that we’ve defined not simply the motive but the techniques being utilized to differentiate a terrorist from someone who is not a terrorist. And that—one of those is the steady expansion of the use of explosives or the believed use of, the suspicion that explosives are being collected for violent purposes, and defining that in itself as a sign of terrorist or terrorist intent.
Drone Policy and Transparency [13:31]
Bob Zadek: Now, with respect to foreign policy, which, Chris, you have written so much about, one of the byproducts of the political cover derived from the War on Terror is the use of drones. And when I say the use of drones, I’m not talking about a weapons choice. I’m not talking about just a very fancy rifle. When one talks about drone policy, we are not talking about the method, but rather we are talking about the fact. The fact is that the American government feels justified and permitted under international law to kill somebody in a foreign country on the flimsiest of suspicions with no oversight. And we’ll get to in a second the killing of Americans, a whole other issue. But let’s focus on the President making a decision to—whatever means, but it’s going to be a drone more likely, it could be a bullet, it could be a poison-tipped umbrella, but it’s going to be a drone more likely than not—the statute permitting the President to do that, or the memo or the political cover, and what the President, what the executive has concluded it has the right to do under the protective umbrella of the War on Terror.
Chris Preble: Right. Well, the President, of course—no one really disputes the President’s legitimate authority to defend the United States in the case of imminent attack. And I think even many of us, like you and I, who think that the Constitution was fairly clear on this point, that the role of the Congress is to declare war and when we are launching and waging a war overseas, then at a minimum the Congress has a role to play and ideally should actually declare war, which they haven’t done since World War II.
What the drones or other technologies like them—and again, it could be a small unit like a special operations force or something like that, like the unit that took out Osama bin Laden—it allows the President to carry out acts, acts of violence under the guise of the ongoing War on Terror. But I think it hands quite a considerable amount of power to the President with very little oversight on the part of Congress.
Now, a couple points on that. First of all, Congress does have that authority, and in many times they’ve chosen not to exercise it. I think that’s as much a fault of our members of Congress as it is of the administration. But at a minimum, you allude to the evidence that they are using to carry out these attacks, to target someone for an attack, including lethal force. The administration—and the Obama administration and the Bush administration before it, I’m sure—would say that the evidence that they are using is quite strong. It is not flimsy evidence. It is based on multiple sources. It has been vetted by different folks. And I believe that may be true. But I’m most concerned about the lack of transparency in this entire process. There is no oversight and there’s no or very little discussion about what criteria are being considered, what factors come into play, if any. That’s the part that I think a growing number of Americans are becoming just uncomfortable with. I don’t think there’s still quite a bit of deference to the President given the state of fear that we still live under today. But I think there’s a rising sense that these kinds of things should be subjected to greater scrutiny and there should be more transparency around it.
Sovereignty and Killing Citizens [17:31]
Bob Zadek: And right now, it is just the executive branch who says, “Trust me, I am not taking this power lightly, but yet I have the power to bring a drone into a foreign country, violating their sovereignty, perhaps without their consent, indeed even over their opposition, to kill one of their citizens who I determine—I, the President, determine—to be a threat.” And aren’t there negative—and clearly there are, this is quite rhetorical—foreign policy implications about all the enemies we make in just ignoring the sovereignty of other countries?
Chris Preble: Well, of course. It is a rhetorical question, but it’s worth engaging. Look, there has been a long-standing principle in international law for centuries, in fact, where countries generally respect the sovereignty of other countries and we don’t violate that casually. And the fact remains that the United States has generally observed that principle until and except, you know, 9/11, and it has ramped up quite dramatically.
Now, some countries will, we know, are tacitly approving of US actions but don’t wish to admit as much to their people, one because they don’t want to admit that they’re allied with the United States—that’s a problem of its own—or because they don’t want to admit to their people or to their neighbors that they are not capable of controlling the territory that is their responsibility. I think that’s part of what is most upsetting, for example, in the case of Pakistan. Not just the drone strikes, but we know the case of the bin Laden raid as well, is that the bin Laden raid revealed a real weakness and vulnerability in Pakistan’s ability to defend itself and its airspace because that act was carried out, as far as we know, without their knowledge and they didn’t react until after it had all gone down. And that sends a very troubling message to that government about their ability to defend themselves from other strikes from other adversaries potentially, or from other countries like the United States. I think that this violation of sovereignty therefore does raise some serious concerns for US foreign policy in terms of our relations with these countries. And I would hope—and again, I think this is true, but I would like the administration to spell it out a little bit more clearly—that they take those considerations into effect and therefore are engaged in these sorts of acts only in very, very rare cases when the person in question is of great concern and we are willing to take the risks of harming relations with these different countries.
Bob Zadek: Now, this bleeds into the very delicate issue of the President’s power, power that he’s asserted, to kill Americans if the Americans are on foreign soil. We’ll not get to, because it’s just we can’t nail anybody down, whether the President claims the power to kill Americans on American soil. This was the issue which Rand Paul brought to the fore in the filibuster. But focus on the more obvious issue of an American traveling who happens to be in a foreign country, and the President has said he has the power to kill that American citizen who was on foreign soil. Now, Chris, that has profound—that’s no longer a foreign policy issue, but foreign policy is the cover—but that has profound constitutional protection issues for all of us.
Chris Preble: Well, I certainly think so. I think that the protections that we are afforded as citizens of this country are, you know, do not stop at the water’s edge. And we carry them with us when we travel and do business abroad, etc. And for the, you know, for the vast, vast majority of us, we are doing so for, I hope, for all the right reasons because we care to see parts of the world, not just here in this great country, but to travel around and to interact with people around the world. That’s one of the things that makes this country so great and always has.
And so the assertion that a person forfeits their protections, their constitutional protections, by virtue of being in a foreign place and being suspected of collaborating with certain other suspected people is a very serious claim by the administration, by the executive, that in effect that they are judge, jury, and executioner, or at least can be. We know of a few cases, the most famous of which is the Anwar al-Awlaki case, who was killed in Yemen a few years ago. Then his son, a 16-year-old son, who was absolutely not a terrorist.
Bob Zadek: A 16-year-old son who was absolutely not a terrorist.
Chris Preble: Well, that’s correct. As best from everything we know, that is correct. Al-Awlaki was strongly suspected of being an inspiration to several prominent figures, including the Christmas Day bomber, for example, an inspirational figure. And the claim being made—and I don’t want to give this too much credence—but the claim being made is that a person essentially forfeits their constitutional protections when they cross some threshold, a threshold that isn’t particularly clear in my mind, and therefore that those protections are essentially null and void.
Break: Reed v. Covert [23:44]
Bob Zadek: And Chris, as we—we’re going to go to break and we’ll be back with Chris in about 90 seconds. But I want to go to break with this quote from this US Supreme Court case of Reed v. Covert. The Supreme Court said, quote, “At the beginning, we reject the idea that when the United States acts against citizens abroad, it can do so free of the Bill of Rights. The United States is entirely a creature of the Constitution. Its power and authority has no other source. It can only act in accordance with the limitations imposed by the Constitution. We don’t lose our rights when we travel to Canada, and any claim to the contrary is wrong.” This is Bob Zadek. I’m talking with Chris Preble. We are talking about foreign policy, drones, cyber war, protection of American citizens overseas, and the expanding use of governmental power under the cover of war. 800-345-5639. Back shortly.
[Music]
Post-9/11 Statutes and Historical Threats [25:12]
Bob Zadek: Welcome back to the Bob Zadek Show every Sunday at noon at News Talk 910, the leading libertarian talk radio show in the Bay Area and around the country. www.bobzadek.com is the way to communicate. 800-345-5639 if you are phone enabled. I am talking today with Chris Preble of the Cato Institute. We are discussing foreign policy, why libertarians care so much, why we all should care. Is the Constitution being eroded under the wonderful political cover of that very useful three-letter word, “war”? Chris, thanks for joining us.
Chris Preble: Thank you, Bob.
Bob Zadek: Chris, there’s another related issue which came to the fore yet again at the time of the Boston Marathon bombing, where the issue was: do our constitutional protections apply to non-citizens as well as to citizens? And that was a big deal for many people, and we’re going to discuss that issue in a moment. But before we do, Chris, give us the statute that started this all off, perhaps, or the series of statutes started right after 9/11. And statutes were passed in great hurry. I mean, it took virtually a few days for the Patriot Act to be passed. It was drafted and sitting there, just waiting for the perfect opportunity. And give our audience a bit of very rough bullet-point history of the statutes that gave the government so much power they didn’t have before 9/11.
Chris Preble: Right. Well, the two most important ones you’ve already alluded to: the Patriot Act, the USA PATRIOT Act, which allowed for a range of surveillance and other investigatory powers handed to the federal government under the guise of preventing future terrorist attacks. That has been subjected to some scrutiny because, again, it does—it shifts, it seems to me, the burden of proof from the government to the individual. You know, that classic principle “innocent until proven guilty,” it seems to me, has been eroded in some instances under the Patriot Act.
The other one is the Authorization to Use Military Force, which was, of course, the original authorization to go into Afghanistan. The Authorization to Use Military Force was fairly specific to the events of 9/11 and to those individuals and persons that were involved in the planning and execution of that attack. It has been now over 11 years, of course, since 9/11, since that law was passed. And so we’re approaching the point at which individuals who were maybe, you know, seven or eight years old at the time of the 9/11 attacks are somehow being targeted under that authority. I think some people have raised some questions whether or not the law should be updated or perhaps—my preference would be for it to be sunsetted after the combat operations in Afghanistan draw to a close next year, with some time after that allowed, maybe a year or two, to allow that to wind down.
Another, of course, is the creation of the Department of Homeland Security. That was another law, another agency established after 9/11 to ostensibly keep us safe from terrorism, to prevent future terrorist attacks. I think that is at best a mixed bag. A former colleague of mine, David Rittgers, wrote an excellent paper for Cato calling for abolishing the Department of Homeland Security, in effect.
So there are quite a number of laws on the books. And the point that I want to make is no one disputes, I think, the President’s authority to defend this country in the event of an imminent attack. And that has always been the case. And we libertarians in particular, Bob, take the Constitution very seriously, which is why the Cato Institute has handed out or sold, as I recall, something like five million copies of the Constitution over our history. We take the Constitution very seriously. And when I hear people say that the Constitution was designed for a different era, a different time when the threats were quite different than they are today, I agree with them. The threats were much greater when the Constitution was created in 1787. The country was in extraordinary danger from so many threats all around. And you look at what the founders of this country were dealing with at the time when they established that government, the threats we deal with today pale in comparison. It’s just tiny, tiny relative to what they were dealing with.
Bob Zadek: And we were weak. We had no resources and no people.
Chris Preble: That’s correct. That’s correct. And so I am—and then, of course, even more recently, you know, I served in the US Navy in the waning days of the Cold War. I happen to think that was a conflict that was, you know, multiple wars, but the threat posed by the Soviet Union to the United States of America was a serious and legitimate one. And we managed to defend this country without resorting to a wholesale violation of civil rights and civil liberties. And in the few occasions when we did, the real excesses of that period are looked back now as a great mistake, as a stain on our history, appropriately so.
Security Theater and Declaring Victory [31:11]
Bob Zadek: Like McCarthy. Probably what McCarthy did was a smattering of what we are taking for granted today. McCarthy was another example, a failed example, of using a threat to seize power and to trash the Constitution. We all are ashamed of McCarthy, but we are not equally ashamed of our government today. And my question to the audience is: isn’t that a reasonably fair parallel? And more importantly, Chris, the War on Terror, TSA—unless we’re prepared to say that the surrender of our rights and TSA is, as they like to say in the media, a “new normal,” this is what it is, which means it’s only going to get worse.
When do we declare a victory and saying, “Okay, there were 114 terrorists in Al-Qaeda that we have targeted that planned 9/11, and we’ve killed 112 of them, there are two left and they are very sick, so let’s pack it up and go home”? When do we ever declare victory? You know, I think sometimes I wish Alfred Kahn were in charge of foreign policy. Alfred Kahn was the second public official after George Washington to voluntarily relinquish power when he deregulated airline travel in 1976. The one before him who relinquished power was George Washington, who agreed not to be king. We had George Washington, Alfred Kahn, and that’s it. So when does Washington say, “We don’t need TSA, it’s under control,” because after all, it was under control for 230 years, we were fine. And if TSA was a reaction to a particular threat, isn’t the threat gone?
Chris Preble: Well, I certainly think the threat has greatly abated. And if it’s not gone, certainly the costs that we are paying—the actual direct dollar costs of maintaining this homeland security infrastructure, and then the other costs which are harder to quantify in terms of our loss of liberties—are vastly greater than the threat that they are confronting. I think one way to get at the TSA and other entities like it that have been created since 9/11 to deal with terrorism is to focus on the cost, to focus on the unintended consequences. You know, libertarians like to talk about unintended consequences. Don’t look at just what the policy is aiming to do, but look at what other things have grown out of it.
That research has been done by colleagues of mine and others, and it’s really quite good. It shows that the costs that we’re spending are far, far greater than the risks. So you need to explain—and to answer your other question, when will this end? When it will end is when the public is not so fearful of terrorism that political leaders are willing to accept the small likelihood, but a likelihood nonetheless, of a subsequent attack happening and to be able to say, “I did everything that I could have to stop this, but we cannot expect to stop every single incident all the time.” That is an unreasonable standard.
Fear vs. Reality and the Boston Lockdown [34:50]
Bob Zadek: Chris, but the problem is the typical American, I dare say, doesn’t read the Foreign Policy Weekly. They go about their lives and they only know about terror what the government tells them. And the last thing the government’s going to do is to say the threat is diminished. And I pose this question to government, to my listeners, my friends, and everybody out there: Let us assume we had no TSA right now. Let us assume we know everything we know about who’s in the world right now, and we know that people aren’t that fond of us, and we know that they wish us harm. Could the President get through Congress the creation of TSA as it is today based upon what we know about today’s threat? The answer is an overwhelming “of course not.” Well, if we cannot get it through today, doesn’t that tell us that we don’t need TSA? That to me is the acid test.
And you know, there was a very smart fellow named Harold Koh. Harold Koh was a legal advisor in the Obama State Department, a career diplomat, a smart fellow. And he recently resigned. He had enough. And he said—and there’s a quote worth repeating from Harold Koh—he said, quote, “Just because someone hates America or sympathizes with Al-Qaeda does not make them our lawful enemy,” close quote. That from Harold Koh, an Obama State Department official. And what we do is we have all of this expensive infrastructure that Chris has outlined because people hate us. Oh my goodness, oh my goodness, what an overreaction is that.
Chris Preble: Well, I think it is an overreaction. I think one of the things that we’ve tried to understand is what is it about terrorism that is particularly fear-inducing? You know, it’s not enough to point out to people that the chances of being killed in a terrorist attack are smaller, for example, than the chances of being struck by lightning or being, you know, dying from a poisonous bee sting or something like that, or an allergic reaction to a bee sting.
Bob Zadek: Although, by the way, that is the statistic. That is an accurate statistic.
Chris Preble: Correct. And yet, okay, so these statistics people can—you know, we can talk about these statistics, and yet people’s fear of terrorism is far, far greater than their fear of being struck by lightning. Why is that? There’s something about the nature of terrorism, the combination of a willful desire on the part of a human being to cause harm—so not a natural disaster—and the effect that that violence is intending to produce, which is some political response, some political reaction. The combination of those things is likely one of the reasons why people are more fearful of terrorism than they are of other things that can kill or are likely to kill or harm them.
So one of the reasons, one of the things that we talk about in our book in particular, is the way in which public officials talk about terrorism is very, very important. And not just public officials, but people in the media, people like yourself and myself, when we talk about this on the radio or television, it’s really important to try to put these things into perspective. And I do sense—let me be uncharacteristically optimistic here—I do think that the combination of the cost and inconveniences of the post-9/11 counterterrorism things like TSA being the most visible of those, and the relative lack of any major terrorist attack since 9/11—and of course the Boston Marathon bombing is the one that’s fresh in everybody’s mind right now.
Bob Zadek: Although it wasn’t a terrorist attack, as best we can tell.
Chris Preble: Well, we’ll see. It certainly has some characteristics of a terrorist attack. We don’t know, of course, because the perpetrators haven’t communicated what their motive was. But I think that the combination of the cost and the inconveniences with a kind of growing appreciation, the way that people talk about this, suggests that we are perhaps at a stage where we can have an adult conversation about what level of cost and inconvenience is appropriate relative to the nature of the threat. I’d like to believe that was true. I’ve seen some evidence of that. And yet, on the other hand, as you alluded to at the top of the hour, the reaction in Boston, the effectively shutting down a major American city to hunt down two fugitives, was an overreaction, it appears to me. We hunt down fugitives all the time without having to shut down cities in the process. And so even while I was somewhat encouraged by the way people talked about that incident in the immediate aftermath, I was discouraged by the reaction on the part of the public officials there on the Thursday and Friday after the attack.
Security Theater and Normalization [40:21]
Bob Zadek: And you know, the part of what we saw, we saw—there could have been looking at a scene from Afghanistan or Iraq when we saw the weapons and the vehicles used by the police in Boston. I mean, it was absolutely visually martial law in a major American city because there was one 19-year-old with a gun wandering around. We had martial law, and for the most part, the public welcomed it. They felt protected. It’s scary at how docile we have become and permissive of the government’s overreaction.
And TSA is a perfect example of that overreaction. And in with TSA, the real failing of TSA, which is a reaction to a non-threat for the most part, but TSA is always fighting yesterday’s war. What they look for is they look for the methods that failed. Here’s what they do: they look at a terrorist attack or an attack, they pick one that failed, and they say, “Let’s protect against it.” And that’s what they do with underwear and shoes and liquids. And does anybody doubt that we are vulnerable—our water supply or this supply—as a country, we are vulnerable if somebody wants to do us harm? And to have all of this showmanship at the airports while we are vulnerable in so many other aspects is just, as they say, political theater. It’s just security theater so the people can feel comfortable.
And Chris, you said something earlier about when the public feels that the threat of terrorism goes down. The only way they’re going to feel their way is if government takes the lead. There’s not going to be an article by George Will who’s going to say, “I declare in the Washington Post the War on Terror is over.” It can’t come from the media, it can’t come from Cato or Reason or Heritage—it’s not going to come from Heritage anyway—it can’t come from any organization but for the government. And the real leadership would be for the government to say, “Okay, we’ve won, we are now going to dismantle what this incredible temporary apparatus and go back to life as normal.” I urge the people of this country not to accept life today as normal. When we do that, they—whoever “they” is—have won, and we have surrendered our freedoms. Madison warned us that we will lose our freedom—and I’m simply paraphrasing—one tiny loss of freedom at a time. And we look back and we say, “Where did it go?” Well, it went one tiny freedom at a time. And that’s what’s happening in this country.
Chris Preble: Well, when you talk about how the government communicates with the public, it seems to me that one of the crucial metrics, one of the crucial measurements that we should apply to the government to determine whether or not they’re succeeding in their job is not simply the prevention of attacks, but also: are we fearful? In other words, we can declare that a counterterrorism policy is working when we are not terrorized, when we are not terrified, when we are not fearful of things, particularly when we are not fearful of things that objectively are less likely and therefore should be less fear-inducing than we are today.
Again, that’s the part I think we haven’t thought enough and we haven’t talked enough about this in this country, that we should measure these new agencies, including the Department of Homeland Security, on that basis. And if we feel insecure—and I think inappropriately insecure, we feel less secure than we actually are—then it’s a responsibility of the government to set the record straight. That includes putting it in proper context, it includes talking about it in a sensible, reasoned way. And I think there’s still quite a bit of work to be done there.
Bob Zadek: And you know, Chris, you’re exactly—obviously you know you are—you’re exactly right. And the fact is, if I were a terrorist, I would say, “I’ve won.” They are—the purpose of terrorism is not to build a body count. That’s not the goal at all. They have an infinitesimal body count, but it is units of terror. Have they terrorized America? And right now, all they had to do was one or a few acts, and then go home. They could all go take villas in St. Thomas. They’re done. They had—they can just sit back, watch the news, and watch us remain terrorized, watch us destroy our own liberties more than an outsider would. We are destroying our own liberties, and the terrorists are sitting on a beach in St. Thomas watching it all happen, knowing they have inflicted permanent, permanent damage on the American Constitution, on the American freedoms, on the American way of going about their lives. They have won, and the only way we seize victory away from them is by declaring we are no longer terrorized. But that can’t happen when the government is the instrumentality of our terror.
Chris Preble: That’s right. I think that—the only thing I would disagree—it is not permanent, Bob. The government has to constantly reimpose these restrictions. And they do. They don’t—they perhaps they don’t have to come forward and reauthorize, although some of the laws have been reauthorized. And so there is still a tension, there should be, there should be a push and pull between the government and the public that they are supposed to serve. And so I’m not—I don’t think it is permanent. I don’t think it is inevitable that we will be saddled with this forever. But it does require the kind of conversation we’re having right now, an honest, sober conversation about the nature of the threat, how you deal with the threat, what we are willing to sacrifice in exchange for reducing that threat modestly.
And if we can have that conversation, then I think we can improve where we are, where we’ve been. And again, we’re not going to eliminate the possibility of a violent attack happening in this country, a violent attack with political purpose. We cannot eliminate that entirely. But we can eliminate the overreaction to those events, that is, the reaction to those events that are far in excess of the harm that they cause, because it’s the reaction to the events that oftentimes impose the greatest cost of all.
Generational Normalization [48:04]
Bob Zadek: And the difficulty with the passage of time is we have a generation which now has grown up—an entire generation which has grown up with the level, with the loss of freedoms and the incredible government-imposed inconvenience. So to this generation, the Generation Y, this generation, to them, this is the way it is. And therefore, they only know about pre-TSA from what they read or what they see in Rock Hudson movies when he boards an airplane and he goes from his car to an airplane without any contact with another person. That’s all they know about pre-TSA life. So the problem is, it’s like we are trying to keep the flame alive, and some people look at us like, “What’s the problem? You’re inconvenienced,” not having experienced a life with considerably more freedom than we have now.
Chris Preble: That’s an excellent point. Which is why, of course, it’d be nice if we could have—if we could compare this to the experience in other countries, if the travel was much less onerous in other places. But of course, the United States has effectively imposed our regulations on the rest of the world, not entirely, but to a considerable extent, because in order for a country, another country to be certified as safe to travel, they have to meet our standards. And that’s a way in which our regulations and laws have inconvenienced everyone, not just Americans.
Bob Zadek: You know, Chris, I experienced this—as we’re running out of time—but a parting story. I recently took the train from Washington to New York. And I hadn’t been on the train in forever. And when I got on the train, it was like the first thing I noticed was nobody was telling me to sit down, nobody was telling me to put on a seatbelt, I could use my cell phone whenever I wanted. I felt like I died and went to heaven. And I remember that’s what it used to be like in an airline. And people ought to just—people ought to be given one flight a week when there’s no TSA, just to remind them what it’s like. It’s like going to Sturbridge Village in Massachusetts and seeing how quaint this all is—no security. People are—we are running out of people who experienced the level of freedom, Chris, that you and I grew up with. And that’s what I fear. And I sure hope you’re right that the public will just say, “We’ve had enough.”
Chris Preble: Well, we can hope. In the meantime, we have conversations like this, Bob, and we talk about it, we write about it. And people can learn a lot about the work that Cato’s done on this at our website, cato.org. And I thank you for having me on the show and having the chance to talk.
Bob Zadek: Chris, it was nice talking with you again. Thanks so much for joining me. This is Bob Zadek. I was talking with Chris Preble of Cato. We were talking about the War or Non-War on Terror. I’ll be back in 90 seconds. We’re going to visit the issue of student loans. Generation Y yet again, you’re on trial, Generation Y. 800-345-5639. I’ll be back in 90 seconds. Thanks again to Chris. I’ll be back in 90 seconds.
[Music]
Student Loans and Nationalization [53:06]
Bob Zadek: Welcome back to the Bob Zadek Show every Sunday at noon. Thanks so very much for listening. I sure appreciate having your company for this 90-minute show. We are the only live libertarian talk radio show online right now around the country. Thanks so much for listening. Join the conversation, 800-345-5639. Communications on Facebook, Twitter, LinkedIn are always welcome.
Well, student loans are in the news again, big time. There’s a lot going on in the area of student loans. It implicates a whole generation of Americans, the so-called Generation Y, the Millennials, as they are called. They are the focus of this conversation, but so is governmental policy.
Student loans. Well, a bit of background. College has become very expensive. Students can’t afford to pay the tuition, or their parents can’t, so they borrow money to pay for the college. A few years ago, Washington nationalized the whole student loan process. There was a time student loans were all made by banks. They made loans the way they made car loans and home loans; they made student loans. And they applied criteria and they denied loans or accepted loans; they made loans.
Then a while ago, government decided that some students were being rejected, therefore they couldn’t go to college. So the government decided, “Hey banks, make a loan to everybody and we will guarantee those loans.” So the banks made loans to students guaranteed by the federal government. That was like the banks—as if the banks had died and gone to heaven. Because now they make a loan, they’ve got a federal guarantee, they can charge market interest, and in effect, they’re making a loan with no risk. And the banks were making buckets of money.
Well, then along comes Washington and says, “No, no, that’s too good a deal for the banks. We’re going to nationalize the whole process and we are going to become the lender itself. We’re not going to guarantee the bank loans; we’re going to make our own loans. Now banks, you can still make loans if you want, but we are also going to make loans and we’re going to compete.” So we have private loans made by banks, unguaranteed, and we have the bulk of it is loans made by the federal government to students.
So now we have the federal government in the lending business. Well, and the federal government makes loans irrespective of the credit quality, irrespective of lots of things; they just throw buckets of money. Now, one of the byproducts of this, of course, is students, being focused on the short run, they tend not to care that much about how much tuition costs, because it’s invisible to them. They are simply—it’s being paid for by a student loan. Therefore, they don’t actually write checks for anything. And as we have learned from healthcare and from other government programs, when you don’t care about how much something costs, then the one selling the product can basically charge whatever they want, because the buyer, the students, don’t care. It’s not, quote, “their money.” Now, it is ultimately, but students, like other people, don’t think that way. They say, “Hey, it’s in effect free and I’ll deal with the debt part of it later.”
So as a consequence of the ridiculously generous federal student loan program, tuition has gone through the roof because there’s no resistance. Nobody cares about how much tuition costs because the federal government’s picking up the tab, at least for the loan part of it. Well, so now we have student loan is bigger than credit card debt in this country. And we have everybody owes tons of money. It’s common for students to owe two and three hundred thousand dollars when they graduate college.
Now, one can say, “Well, the students must have made a calculation that they’re going to earn enough to pay back the student loan and they would earn that money because of their education. Therefore, they are getting value. It is not an expenditure, but in Washington talk, that is an investment.” Because the student is spending money now to make themselves more marketable, they earn more money, and therefore they have enough to pay back the student loan with the additional money they earn and to live the kind of life they hope to live. That’s the calculus.
But of course, it doesn’t work. Because now we have students who are graduating with big debts and no jobs, because there’s no jobs, or very few jobs, or the wrong jobs. The courses the students study do not make them employable. And thus we have today, we have students with buckets of debt, no jobs, and we’re looking at huge defaults. And that becomes the next bailout. So what is the result of all of this? Incredibly high debts, total inability to pay, federal government on the hook. That’s where we are today.
Elizabeth Warren’s Proposal [58:21]
Now, the next step, totally predictable in a Democratic and progressive administration, the next step is suggestions that we give the students a break. Now, what’s that all about? Well, student loans had a statutory rate of 6.8% per annum. That was the rate on most student loans where the government made the loan. A couple of years ago, as part of our bailout, Washington bailed out students and said, “Okay, as a temporary measure, we’re going to cut your interest rate in half from 6.8 to 3.4.” And that’s temporarily just till we get through this financial crisis, then it kicks back up.
Well, the kick-back-up time is right now. And Congress has to either do nothing, which means the student loan debt goes back up to 6.8 and the students are saddled with—that’s their word, not mine—very high debts, or we keep it at 3.4, or we do something else. Well, now there’s a movement to do something else. And the not-my-favorite Senator, Liz Warren, has made a proposal to lower the rate, the rate which we charge students, which should be 6.8, it’s now 3.4. She says lower it to like a half of 1%, which is the rate that the Fed charges to the major banks. Liz Warren says, “If we can lend it cheap to banks, why can’t we lend it to students?” And if you want to hear it in Liz Warren’s own words, Ray, if we can play clip number three, please.
Elizabeth Warren (Clip): A big bank can get a loan through the Federal Reserve discount window at a rate of about three-quarters of 1%. But this summer, a student who’s trying to get a loan to go to college will pay almost 7%. In other words, the federal government is going to charge interest rates nine times higher than the rates they charge the biggest banks—the same banks that destroyed millions of jobs and nearly broke the economy.
Accountability and Free Market Education [61:01]
Bob Zadek: Well, that makes me crazy. First of all, my reaction to Senator Warren is: why not charge the banks 6% for money, or something less than 6% but something more than 0.5%, so the banks don’t get money so cheap? But putting that aside, that’s for another show. Liz Warren says, “If we can lend it cheap to banks, why not lend it to students?” And my comment is: what’s the reason? She acts as if a student loan is somehow special. It is different than a student borrowing money to buy a car. What if that same student owes money on a car loan and on a student loan? That same student has too much debt and no income. Why not say all of the student’s debts are reduced, or all of the interest payments are reduced? There’s nothing special about student loans.
But more to the point, where is the—forgive the expression, Liz Warren—where is the accountability? This student made a decision to borrow money to buy a college education. The student is buying a college education. Well, if you buy something, you have to pay for it. And why didn’t the student make a calculation about whether what the student was buying was worth the money? And if the student didn’t make the calculation, shouldn’t the student suffer the consequences? What is special about a student loan? And why should students be immune to financial education and making intelligent decisions? After all, if that same student went out and bought a very expensive luxury car on credit—another really dumb, impulsive decision—that student will suffer the consequences of the expensive car loan. That student will have the car repossessed if he doesn’t pay, and will be sued, and will suffer a judgment, and may have to go bankrupt. Why doesn’t the student have to bear the same cost?
Part of the answer is there has been a study, more than one study, a very disturbing study, frankly, about what is called the Generation Y generation, Gen Y, which is the Millennials, those citizens who are in their roughly in their 20s. And the study has found that that generation is six times more—they have six times the entitlement mentality than generations of people in their 60s. That is to say—and this, by the way, is more than any other generational gap. So we are creating—and the reasons are of course complex—generations, the current generation being the best example, of those who have this entitlement and somewhat narcissistic mentality that they are entitled to have their tuition paid for, and they are asking that they be immune from their bad financial decisions.
Now, it gets more complicated, of course, this issue, as they all do, of student loans. Because in another article, it was pointed out that this student loan overhang, all of these debts, are very bad for the economy. Because students—and indeed the New York Times in an article just the other day pointed out that if we have students who graduate and they have lots of student loan debt that they can’t pay, then according to the article, it—this debt, quote, “makes it even harder for many of them, delaying purchases of things like homes, cars, and other big-ticket items and acting as a drag on growth.” So the argument is: if you forgive or diminish student loan debt, then you free up these students to make big-ticket purchases like homes and cars and whatever other items qualify as big-ticket, and the economy will benefit.
Isn’t that absurd? If you—if they sent out a bunch of checks to a bunch of people and said, “Here, you have to spend this on a big-ticket item,” that would help the economy too. But there’s no—none of us can defend it on any kind of an economic grounds. So picking students as being the spenders, the official spenders, so they will spend so we all can prosper—isn’t that a joke? I say, by all means, these students having incurred the debt should pay. They should pay the debt they lawfully incurred.
The article pointed out a name: there was a Shane Gill who was described in this New York Times article as a 33-year-old high school teacher in New York, doesn’t have a car, owes $45,000 in student loans plus $40,000 to her parents. She cannot get married and have kids because of all of this debt. So what? Why didn’t she think of that when she incurred the debt? She knew she was going to have to pay it back.
Now, Washington came up with another hair-brained scheme. Washington says—and this student debt issue is so politicized, it is so politicized—Washington now says, and the Obama administration has proposed, that we have a new plan for student debts. That we have the students—we limit the monthly payments the students have to make to only 10% of their income after taxes and living expenses. So whatever is left over, they pay 10% of that to student loans. And after 20 years, whatever they’ve paid, the balance is forgiven. They don’t have to pay any more back. And not only that, but if the student has a—what’s called a, forgive the expression, “public service job,” that means they only have to work for 10 years and the debt is forgiven.
Now, that raises so many questions. Why in the world should somebody be given a special break because they do a, quote, “public service job”? And indeed, what is a, quote, “public service job”? Why is somebody who is a teacher or who works in the massive federal or state bureaucracy, and they are fairly paid with generous benefits, why should they get an additional benefit just because they are working in the belly of the beast and they are working for government? To me, they should be penalized if they’re working for government, not get a benefit. But that all is a side issue. It’s all part of this very, very politicized issue about student loans.
And the problem is student loans themselves are—it’s a very bad deal. Tuition is highly overpriced and there is very little value. And I started to—when I was thinking about this issue, I wondered to myself: what if, what if there were no federal guaranteed student loans? What if students had to either pay tuition out of their own pocket or what if they had to borrow the money at market rates? What would happen? Well, the fast reaction is: students couldn’t afford college. Well, but then what? Would the colleges close their doors? No. The colleges, for the first time reacting to something resembling a free market, would have to find some way to lower their costs. And they would lower their costs because they have to get more customers. So the immediate effect of cutting back on student loans would be to lower the cost of tuition. A profound positive effect. Then colleges would have to find ways to deliver the services more efficiently and maybe with less frills. So the student would be buying more pure education and less frills. Think Southwest Airlines, which has reliable service, gets you from point A to point B, no first class, no frills, although they do have Wi-Fi, and they are very, very cheap. And Southwest was able to prosper because they function in a basically free market environment, thanks to Alfred Kahn, of deregulated airlines. Whereas the universities function in a protected cocoon of totally regulated and controlled demand, clear demand which is not vulnerable to price changes.
There’s really a question about the value of a college education, which students don’t think about because they don’t have to, because they’re in their minds getting it for free. The statistics are that there are 80,000 bartenders in the US with a bachelor’s degree. 17% of the baggage porters and bellhops in the country have a college degree. 15% of taxi and limo drivers have college degrees. And we are paying for their student loan debt without any benefit to us. Is that sensible policy? Would those bartenders, limo drivers, and the like be so free and spend the money for a college education only for the privilege of being a bartender? I doubt it. And college costs are one of the few segments of the economy that are increasing much faster than inflation because nobody cares. Wouldn’t it be exciting to see colleges have to compete on price for students?
Caller: Mark from Berkeley [72:28]
Bob Zadek: Now, we have a caller, not surprisingly from Berkeley. Mark from Berkeley, welcome to the show this afternoon. How are you?
Caller (Mark): I’m good. How are you? I’d wish you a happy Mother’s Day.
Bob Zadek: Oh, thank you. Well, this is San Francisco, you really can’t tell by the sound of my voice, but go ahead, Mark.
Caller (Mark): Okay. Student loans. Why do homeowners get an interest break? Homeowner borrowers get an interest break. Why do oil and gas companies get tax breaks, etc., etc.? If we’re—for the same reason that people are arguing that student borrowers should also get some kind of a break, because I think somebody decided a long time ago that getting an education was a net plus to society. It’s at least as important, I would argue, as homeownership is to society, or oil and gas drilling is to society. So why single out students for what I would consider your—well, I’m not harsh, but for the strict interpretation of your principles, whereas other interests all over society get all sorts of exemptions and benefits?
Bob Zadek: Easy. You asked a question in a bunch of different parts, and I’ll just try to recall them and answer them one at a time. First of all, homeownership tax break: never should be. The why—the why is when people buy homes, they then buy refrigerators and carpeting and home repairs, and it is a boon to the economy. So in effect, whoever’s in power gets to boast about a vibrant economy, which they have built up on the steroids of homeownership. So homeownership is an incredibly stupid—
Caller (Mark): And an education was important for a good job, and in many cases to incubate a business. I mean, look at Stanford and how its educated students have fueled Silicon Valley.
Bob Zadek: Don’t confuse—I am not denigrating the value of an education. But an education has to be worth something to the consumer. The person in the first instance, the person buying the education, has to decide not an education in general, but this education at this university for this cost is the best use of my money. That decision has to be made, and that will cause price pressure on the universities. So in the first instance, the student will make the decision. Second of all, if a college education provides a net plus to the economy, it’ll provide a net economic plus to the consumer, the student buying it. Therefore, the student will decide that the student loan is worth borrowing the money for because he will get a payback the same way that I make a decision to spend money on a stock because I conclude I will get more back than I spend when I sell that stock. The same decision should be made by every consumer buying every product.
Caller (Mark): Well, when you’ve got hundreds of—I’ll say epidemic numbers of students who have all made the wrong calculation by your reckoning, or put another way, the economy tanks on them because of the malfeasance of a lot of players, I don’t think it’s unreasonable to have special treatment for those people.
Bob Zadek: Well, when you say the economy tanks, let’s take Mark in Berkeley. You have—I will make a presumption, don’t know, make a presumption—you have a stock portfolio. The market tanked, your word, and the value of your portfolio went down through no fault of yours. Are you worthy of a government subsidy because you are a victim of something you had no part in, i.e., a failing economy?
Caller (Mark): No, but my life doesn’t depend on my stock portfolio as a student’s does on the fruits of their education.
Bob Zadek: No, that suggests that the only way to make money is by having a college education. The statistics—and the statistics are really pretty compelling—there are, as I said earlier, there are 80,000 bartenders with bachelor’s degrees. Are they worthy of—should I have subsidized their education? And Mark, remember, the subsidy is not curriculum-specific. So let’s assume somebody chooses to study ethnic studies, a job for which the employment opportunities would be less than if you studied computer science. And that student graduates with a four-year ethnic studies degree and, not surprisingly, can’t get a job. What is the benefit to anybody—
Caller (Mark): Well, then the lender should have thought twice about lending to that student if they don’t have job prospects.
Bob Zadek: I agree, which means if we had market-driven lending—
Caller (Mark): Kind of like they loaned money to people who couldn’t afford homes. They knew what they were doing.
Bob Zadek: But then a bank, if you had a not-government program, if you had, let’s say, a market-driven program, a bank would say, “We will give you a more generous loan if you study computer science than if you study ethnic studies, and we’ll give you a lower rate because you’re less risky than if you study ethnic studies.” And all of that will be market-driven. And the colleges that offer ethnic studies degrees will have to charge less because the students can’t afford to pay top dollar. I envision a world where the market will dictate all of this, and people will get educations if they are taking a course of study that will benefit both them and, as a byproduct, society.
Caller (Mark): Okay, well, I can’t argue with both you and the market on Mother’s Day, so.
Bob Zadek: Thanks for your call. We appreciate your calling. Thanks so much.
Caller (Mark): You’re welcome. Bye-bye.
Housing Subsidies and Outro [78:40]
Bob Zadek: In the two minutes we have left, I end on a very positive note. There is—the Obama administration has discovered welfare reform. Headline, alert the media. The good news is, right now our housing subsidies for people who can’t afford housing is open-ended. You get to live in housing forever, so long as you can’t afford it forever. Public housing is a free or subsidized benefit. The Obama administration is taking steps, believe it or not, to make housing welfare, housing subsidies, just like welfare after Clinton and the Republicans reformed welfare, and to provide that you get housing subsidies only for, let’s say, three years. After that, sayonara, go live in an appliance carton or get a job because the free or subsidized housing is over. That is good news as the Obama administration discovers the abominable state of permanent housing subsidies. This is going to tell people who get housing subsidies, “Okay, you have three or five years to get it together and to find some way to support yourself. And if you don’t, you get kicked out so the next person who deserves housing can get it.” That is, believe it or not, positive news. And on this Mother’s Day, what better way to end the show than on a very positive note. Thank you so much for listening. This is Bob Zadek, libertarian talk radio in the Bay Area and around the country. I’ll speak to you soon.
[Music]