Off Course

Mullen and Gates get it wrong.

On Monday, former Chairman of the Joint Chiefs Adm. Mike Mullen and former Secretary of Defense Bob Gates participated in a panel at the Center for Strategic and International Studies on "Strengthening America: Our Children's Future." They delivered some wisdom on defense budgets -- a wisdom that is truly conventional, but also erroneous.

Unfortunately, the errors are so widespread that it is almost impossible to penetrate the discussion with the correction. But our understanding about what happens to the defense budget (which is still the largest in our history in constant dollars and nearly as large as all the other defense budgets in the world, combined) is important to understanding where we go from here, especially after the election.

So here goes. Admiral Mullen said: "Already, the president has reduced the fiscal year '13 defense budget by almost a half a trillion dollars." He clearly meant to say the 10-year defense plan, but, in reality, there was no cut in that plan, at all. The "budget" he talks about was the Pentagon's own 10-year wish list, provided last year, laying out the funds it hoped to receive over the next decade. The wish list included a lot of projected real growth (that is, growth beyond inflation). Then, fiscal reality hit, and the budget the president sent up to Congress this year presented a different wish list for the decade, one that was a cumulative $487 billion lower than last year's.

What Mullen did not say is that this new 10-year projection still hoped for growth in defense funds, but only to keep up with inflation. By any budget analyst's definition, this is not a "cut." It is a more realistic projection. But it is still a "wish list," because the chances are there will be real cuts -- that is, less funding than in the previous year for several years to come. But reporters, politicians, and the admiral go right on spreading the notion that the defense budget has already been, somehow, "cut."

Second, Secretary Gates, and the "defenders of defense," continue to spread the notion that, somehow, defense budgets are smaller than they used to be, measuring the defense budget as a share of Gross Domestic Product. This is true, but meaningless. If we are interested in how big the defense budget is and what capabilities it buys, defense budgets today are higher in real, constant dollars than at any time since the Second World War.

Third, Secretary Gates continues to repeat the notion he once said to me in a small group briefing I attended in the summer of 2010: our budget problem is entitlements, not defense. And we do have an entitlements budget problem. But the Congressional Budget Office has taken a good look at the causes of the doubling of our national debt during the Bush years. And CBO's data show that if you look at the sources of the debt that Congress voted for, defense is responsible for nearly a quarter of the debt growth and the stimulus package for slightly less. (The biggest source is probably the deep recession, which reduced tax revenues and put more people on unemployment insurance.) So defense should be on the table, if we are going to fix the problem.

And, fourth, Secretary Gates insists on repeating his mantra that, when we draw down on defense after a war (we've done four times, starting with Korea), "we never get it right," because "America's adversaries will always have a vote." It's a strange view of history. Yes, Eisenhower "drew down" our conventional forces in the 1950s (and boosted spending on nuclear weapons). But if Gates thinks that meant we were not ready for Vietnam, he's got the history wrong. Ike got us into Vietnam, Kennedy got us in deeper, and LBJ went whole hog. It's not like we didn't choose the war but our adversaries forced it on us and the draw down left us unready. It was a choice, and a bad decision, badly executed, to boot. But it was not a surprise.

If Gates is talking about the draw-down after Vietnam, there is precious little evidence that the Soviets invaded Afghanistan because they thought we were weak. Moreover, we did not fight them directly. We chose to arm the mujahedin, not to send our own troops, and we succeeded. Moreover, the Reagan build-up of the 1980s created the force that carried out another war of choice -- the Gulf War -- which may be the only truly significant military victory U.S. forces have had since the Second World War. Hardly evidence that we got it wrong and were surprised.

And if Gates is talking about the 1990s, the force that was in place after the post-Cold War draw-down was the same force that used Saddam Hussein as a speed bump in a 2003 war that was, again, one we chose. No "getting it wrong" there because we had drawn down. That the force was not prepared for an insurgency is not a result of "getting the draw-down wrong." It was purely bad planning in Rumsfeld's Pentagon.

These erroneous notions thrive because otherwise intelligent policy-makers like Mullen and Gates perpetuate them. Otherwise, it would actually be possible to execute a draw-down and sensibly provide for our real security needs at significantly lower levels of spending.


National Security

Aim High

Guess who's in Romney's 47 percent?

We're not supposed to like that 47 percent -- the Americans who are said to expect the government to provide them with food, housing, and other comforts of life. But then, what do we do about the rich who depend on the government for the same things?

The argument, kicked up by the thoughtless remarks made by Gov. Mitt Romney to wealthy funders in Florida last May, left me thinking about how strange and misleading it is to think of the government as something alien to the American people and, particularly, to American industry.

In my neck of the woods, the most interesting part of that industry is aerospace. It wouldn't exist without the government. Not the way you think, though -- not through the purchase of military equipment. The aviation industry got its start more than a century ago, but, even with World War I aircraft procurement, the industry was dying in the 1920s.

So the industry got busy, creating the government they needed to survive. How they did it is an interesting and revealing tale about who really depends on the government. Big airplanes were too expensive to build, and nobody was clamoring to fly in them. But putting mail in them was another matter. So the first big government subsidy to the aviation industry was the Postal Service (not the military). And the subsidy was for flying mail, calculated not by the number of letters and packages carried, but by the volume of space the aircraft manufacturers made available to fly the mail, regardless of who used that space.

But flying was still an expensive and risky proposition. The aircraft manufacturers and the investors who wanted to create airlines needed some reassurance that their investments would not be lost if planes got lost or crashed. And the insurance industry wanted to be certain they would not lose money if that happened.

So what did they need from the government? Weather information, airfields, beacons, lights, communications capabilities, marked air routes, the things they would all use. And government regulation, yes, regulation, to ensure that the aircraft were airworthy, a promise nobody would accept from the manufacturers. So the government they needed was created -- the weather service, the forerunner of the Civil Aeronautics Board, among others.

Once flying was deemed safe and predictable and the planes were big enough, capital would move in and make money. But the postal subsidy was essential. It long preceded big wartime orders for the planes, a subsidy which has had the industry humming now for decades.

The morality tale here is that big corporations, the ones sitting around in Boca Raton laughing about Mitt Romney's dilemma about who to give his inheritance to, have built the government that takes care of their food and housing, and have done so for decades. The salaries of the major defense contractors are paid by the American taxpayers, and they do mighty well.

This tale is threaded through the entire architecture of American corporate life. How strange that the government-support argument only seems to focus on the poor, the elderly, and working people who are paid so little they fall below the requirements of the tax code.