This is not a happy time for national security policy. There is the strategic ambush of Iraq to manage before it explodes into a wider war. North Korea is back to trying to get our attention, and this time it's got missiles and the bomb with which to do so. Iran is well along in replacing us as the dominant influence in the Middle East and is widely believed to be working on a nuclear deterrent to the air raids on it by Israel or us that leaders there and here are threatening. Hamas, which has never run an operation against Americans, and Hezbollah, which hasn't done so for decades, seem to be psyching themselves up to respond in kind to our violent efforts to crush them. The Taliban are making a comeback in Afghanistan, which just brought in the largest poppy harvest in history. The Venezuelans are replacing the Cubans as our adversaries in this hemisphere, and, unlike the Cubans, they've got oil and money to buy allies for their endeavor. China is rising and the dollar is declining. We have never been so politically estranged from or so much in debt to foreigners. Our only committed ally in Europe, Tony Blair, is about to leave office. And this is just a partial list of the problems threatening the general welfare, domestic tranquility, and liberties of Americans.
There's nothing new, of course, about the world being a troublesome place. Four decades ago, Secretary of State Dean Rusk reminded some of your predecessors in office that: "at any moment of the day or night, two-thirds of the world's people are awake, and some of them are up to no good.." What is newas 9/11 showedis that there is no longer anything much to stop our enemies from coming after us in our homeland. Foreign policy is therefore no longer some nasty thing that Americans do to foreigners; it is also something that they can do back to us, sometimes with fatal results.
It's not just that foreign policy has become more important to our national wellbeing and personal peace of mind. It's that what we do at home also has a much bigger bearing than before, not only on our domestic tranquility, but on the support we can expect from the rest of the world. What we do at home is now a major factor in determining who's with us and who's against us beyond our borders. Increasingly, as all the polls show, people abroad are against us. Many of our former friends believe we have repudiated the values we once stood for. Our country has a lot fewer admirers overseas than it used to. But we do, manifestly, have a growing number of enemies. That's not the sort of trade-off we should welcome. And the post-Cold War world in which it is taking place is a great deal less ordered and predictable than the bipolar order that preceded it.
It's not that the dangers we face are greater. They are not. In the Cold War, the turn of a key in Moscow could have brought death to sixty million Americans within minutes or hours and to another eighty million or so within days or weeks. Horrible as a repetition of 9/11 or even a weapon of mass destruction in an American city would be, we no longer face a threat to our national existence comparable to the one we endured from 1939 to 1989. It will, on reflection, strike any veteran of the Cold War as ironic that, with so much less to be frightened about, we seem so much more fearful than before. But no one can deny that the threats we now face are real. And no politician I've met dares to put them in perspective.
In the earlier and simpler era of the Cold War, the Soviet Union was truly determined both to do us in and to conquer the world, but its leaders tried very hard to prevent its client states and captive political movements from attacking us. They didn't want to be dragged into a nuclear exchange in which all but a few Russians and most Americans would die. But the USSR is gone; no overlord has taken Moscow's place as the leader of those with a reason to hate us. The foreign enemies we make no longer have a patron; they're on their own. So, if we kill foreigners in their homelands, there's no one they care about with a stake in stopping them from trying to kill us in ours. We must do this thankless task ourselves. We must do it by dissolving their motivation to assault us, draining them of their resolve, dissuading them from the path of violence, deterring those who cannot be dissuaded, and killing those who cannot be deterred.
This is the formula the British applied to their long struggle with the various elements of the IRA. It is the approach that Saudi Arabia has more recently applied with equal success to the suppression of terrorist opposition to the Saudi monarchy. It requires a sophisticated strategy that supports conservative values against radical assault by discrediting extremist ideology. It demands effective diplomatic and political outreach backed by sound economic and social policies. It asks of us that we understand our enemies and act to divide rather than unite them. It depends on sophisticated intelligence collection, analysis, and law enforcement, backed as needed by the military in ways that do not make more enemies than they eliminate. And it rests on the recognition that we cannot preserve or defend our values and freedoms effectively by setting them aside or curtailing them and becoming more like our enemies than our former selves. We must remain Athens, not Sparta.
The problems we confront in Iraq and on other less central fronts in our confrontation with anti-American terrorists are primarily political, not military. What we lack is not military might but political acumen. Our failings are not those of muscle but of the mind. Our principal policy coordination mechanisms were created in 1947, when Congress overrode President Truman's objections and mandated the formation of a National Security Council. The NSC system worked fine in the Cold War, which is what it was set up to deal with. But judging purely by results, it has not been able to coordinate responses to the more complex politico-military problems we now confront.
Our current policy coordination system failed to produce a war termination strategy during its first post-Cold War challenge, when we liberated Kuwait from Saddam's occupation; that war never really ended. Our national command authority failed to set achievable goals and stick to them in Somalia. It was for long ineffectual in coping with Bosnia. It fumbled our response to the open emergence of a nuclear arms race between India and Pakistan. It did not focus our leadership on the challenge of terrorists with global reach until they had actually attacked us. It has defaulted on the search for peace between Israelis, Palestinians, and other Arabs. It has proven unable to set clear objectives or produce a strategy for achieving them in Afghanistan. It has yet to produce anything resembling a coherent strategy for dealing with North Korea or Iran or, for that matter, China or Russia or the European Union or the United Nations. It has not even tried to address our growing reliance on imports of foreign energy and money to sustain our lifestyle or the effects on our country of the mounting crisis in the global environment. Clearly, with the State and Defense departments much of the time not even on speaking terms, it bungled the policy coordination role in Iraq and continues to do so. There seems to be a pattern emerging. It is not reducible to convenient partisan dimensions.
This pattern of incompetence has cost us our international followership. To lead a team, you must know how to be a team player. To inspire people or nations to follow you, you must have a reputation for moral uprightness, wisdom, and veracity. To retain authority, you must demonstrate the capacity to reward as well as to punish, and you have to rack up a record of success. To sustain the loyalty of your followers, you must be loyal to them and considerate of their views and interests as well as your own. To hold other people or nations to rules, you must show that you are prepared to follow them too. We all know these things. Why don't we act accordingly?
Part of the reason you were elected is that Americans perceive that we are no longer seen as exemplifying the characteristics of leadership I have just cited as we traditionally did. A large majority of citizens believe that the way we now deal with national security issues has made the United Statesas well as the rest of the world less, rather than more, safe. Nearly eight in 10 respondents in one recent survey thought the world saw the U.S. as "arrogant", and nearly 90 percent said such negative perceptions threaten national security. They're right to be concerned. The reaction to the next major terrorist attack on the United States will not resemble the outpouring of sympathy and support that followed 9/11. Our recovery from our strategic debacle in the Middle East will not be as rapid or sure as our recovery from defeat in Vietnam. There's no common enemy, no Soviet Union, to compel our allies and friends to stick with us.
It would be comforting but wrong to blame most of these problems on the executive branch. The Congress bears considerable responsibility as well. Not only has it largely defaulted on its foreign policy oversight role in recent years, but its resistance to the reorganization of committee jurisdictions has made it impossible even to study how to reorganize the executive branch, let alone to do it. It would, I think, make sense for the Congress and the executive branch to begin this year jointly to consider how to enable the government to develop the more sophisticated policy coordination today's more complex problems demand.
The way we put things together now does not always make sense. Given the topic you've asked me to address, let me cite the example of our spending on military and related functions. We put much more effort into national defense and security than most people realize. In fiscal 2006, our defense budget was $441.5 billion. This was a good bit more than the combined military spending of the world's other 192 countries. It amounted to 3.6 percent or so of our economy which is, by a wide margin, still the largest on the planet.
Buthuge as it isthe defense budget is only part of what we spend on past, present, and future wars. When we estimate military expenditures in countries like China, we quite appropriately include a lot of defense-related expenditures that are outside the official defense budget. If we were to apply the same standard to figuring out our own military spending, we would have to add to our defense budget the supplementals to pay for the wars in Afghanistan and Iraq, the nuclear weapons and naval propulsion systems in the Department of Energy budget, veterans programs in the VA budget, military pensions funded by the Treasury, homeland security programs, various intelligence activities, and so forth. And we would find that, even without including interest on the money we borrow to fund it, our total national defense effort comes in at around $720 billion, or about 5.7 percent of GDP. You might want to see if the Congressional Research Service can come up with a precise figure for how much we actually put into military and military-related programs and activities. No one else has been able to do this. It's worth asking too whether scattering national security-related expenditures all over the federal budget in such a way that no one can tell you how much we spend on them is the best way to avoid redundancy and get the biggest bang for the buck.
At any rate, all this spending has given us what are without doubt the most competent and lethal armed forces in history, and that's a very commendable result. But, as President Eisenhower foretold, we have also built a truly enormous and very influential military-industrial complex. You already knowor will shortly find out how effectively defense contractors interact with Congress. I don't intend to go farther into a subject on which many here are or will shortly become far more expert than I, but I can't help bringing to your attention the newest, highly instructive example of how national security policy is made.
In the summer of 2003, the newly established Department of Homeland Security drew up a list of 160 sites in our country that terrorists might see as targets. Intense efforts by your constituents and others to gain access to this new source of federal funding immediately led to the widening of the definition of potential targets. Within a few months, there were 1,849 targets. By the end of 2004, there were 28,360. Today bearded terrorists in the remote caves of Waziristan are officially feared to be planning attacks on about 300,000 targets all over our country, including I was truly shocked and awed to learnthe Indiana Apple and Pork Festival. (I'm sure they lose a lot of sleep in Waziristan over that one.)
Evidently, our system is extraordinarily good at funding military and related functions as well as at finding ways to spread money around, but one is left to wonder whether it is optimally designed to cope with the challenges to our security and domestic tranquility in the 21st Century. Clearly, too, our political culture is good at enacting sanctions and launching wars when sanctions fail, as they inevitably do, but is it competent at dealing with the challenges we now face? These aren't trivial questions.
You are politicians and therefore experts in both the arts of persuasion and the aggregation of political power to produce results. I want to ask you all, as experts in these things, a serious question. Why do we Americans think we should suspend common sense when we deal with foreigners? Why do we imagine that our differences with foreign miscrants require techniques of influence we would never apply to people here? What is it in our experience that causes us to suppose that trying to put them out of business, pulling a gun on them, beating them up, or blowing up part of their property will cause them to repent and be saved, to mend their evil ways, and to embrace truth, justice, and the American way? Do we really think that public insults and a refusal to meet or talk with people with whom we disagree are the best way to persuade them to embrace our viewpoint? Do we truly believe that politely explaining to foreign leaders that what they are doing is both wrong and not in their interest is a sign of weakness? Would we reason the same way about Americans with whom we disagree? Do we judge that ostracism and beatings are the best way to teach even dogs and children to behave, let alone hostile adults? If not, why do we allow those who appear to believe these absurd things bully those who don't into silence?
Al Capone, who was as American as the Colt revolver, once remarked that: "you will get more with a kind word and a gun than with a kind word alone." True enough, but why omit the kind word? And do we want to be seen as the heirs of Al Capone in our approach to the world?
Of course, talking is better than not talking only if you know what you're trying to accomplish and what you're going to say. And there's a reason that the use of force is generally regarded as a last resort; if you use it up front and it fails, diplomacy can't do much to rectify the facts you've created on the ground. So we're back to the need to formulate strategies, set objectives, and stick to them. We're going to need that capacity more than ever over the years to come.
Here are a few items that pretty clearly need tending. The first three are so obvious that I'm almost embarrassed to mention them in this well-informed company.
o The Middle East. As the Baker-Hamilton Iraq Study Group pointed out, there's more to the Middle East than just Iraq and the region needs to be addressed as a whole. In Iraq, the options are all bad and not improving. They seem to boil down to "talk and walk," as recommended by the Study Group; "cut and run," as many here tonight might prefer; or "surge and scourge," as the neocons are trying to persuade the Decider to decide, despite much military advice to the contrary. Who knows whether anything at all can work at this point? What's clear is that our occupation is in deepening difficulty. The conflict in Iraq is in real danger of triggering a wider war even as it continues to spawn a new generation of anti-American terrorists. There is mounting reason for concern about an assault on the "green zone" modeled, perhaps, on the Tet Offensive in Vietnam.
Meanwhile, Iran continues to gain regional influence and to work at bomb-building; there's still no peace process; Israel is back at settlement-building and trying to bomb Palestinians into peaceful coexistence with it; no Arab leader wants a photo op with us; Lebanon has been ravaged and destabilized; the Turks and Kurds are eying each other with mounting belligerence; there are all sorts of rumors of covert action programs directed at regime change in Syria and plans to bomb whatever nuclear-related targets we can find in Iran; and the Saudis and other Gulf Arabs are for the first time openly denouncing US policy. If that's not an explosive mixture, I don't know what is. It is certainly the stuff of which terrorism is born.
o Afghanistan. We have made the country safe for the poppy cultivators and warlords but not for democracy. A well-focused effort to capture the perpetrators of 9/11, punish their hosts, and deter others from hosting them has deteriorated into an aimless effort at pacification. This has endowed the Taliban with nationalist credentials they do not deserve. Meanwhile, in the broader Islamic world, Afghanistan is now seen as evidence of a broad American-led assault by the West on all Muslims. No one can say what victory in Afghanistan would look like for us. This is an unfolding tragedy that needs a rethink.
o North Korea. Anyone who's had a kid that went through the "terrible twos" will have no difficulty recognizing Kim Jong-Il's effort to gain attention for what it is. Outsourcing diplomacy to China isn't an effective response to this. We are now in the lull before the next tantrum, which will likely be pretty provocative even unnerving and involve missiles, shooting incidents, or further nuclear blasts.
And now, rather than attempt a comprehensive list of the challenges we face, let me briefly mention three other issues of concern, each of which illustrates the interconnectedness of domestic and foreign affairs.
o The Dollar. Every day, we must persuade foreigners to lend us more than $2 billion so that we can keep our government in business, our interest rates low, and our employment rate high. So far we've been able to talk them into this. But, as someone famously once said, if something can't go on forever, sooner or later it will end. Foreign willingness to lend money to us at advantageous interest rates could end at any time.
If we let things get to the point where foreign lenders pull the plug on us, we will face interest charges at levels not seen since the '70s. The housing and stock markets will implode, the price of everything from oil to laptops will skyrocket, and there will be a sharp rise in unemployment. In addition to badly screwing up our domestic economy and politics, a dollar collapse would displace us from the center of the global economy and catalyze a major, highly unfavorable shift in the balance of power. It's the sort of national security development it's worth trying hard to prevent. To do so, we need to get our act back together at home.
o U.S. Complacency. Americans are used to embodying superlatives; being the biggest and the best at almost everything. But it's hard to be proud that we are recognized abroad as the world's largest debtor, its biggest market for illegal narcotics, its most prolific producer of pornography, and its most profligate consumer of imported energy. Concerned foreigners also know that we have the world's highest divorce rate, the biggest proportion of our adult population in prison, and the most elevated rate of infant mortality in the developed world. And they see that we're not necessarily the best anymore in every field. The WHO ranks our health care system 37th in the world in overall quality, on a par with Cuba's. Graduates of our high schools believe they are in the 90th percentile internationally but are actually in the 10th. I could cite other examples but that would be too depressing. So I'll just reiterate the obvious. We have a lot of issues to deal with at home as well as abroad.
As a result of the growing gap between our smug self-image and the way people overseas perceive us, we're neither as attractive to the rest of the world nor as sought after as we once were. This shows up clearly in polling data but an additional measure of it is that, despite the fall in the dollar, fewer highly educated and wealthy foreigners want to come here. There is a diminished foreign student presence here even as the foreign student population in Europe, Japan, China, Australia, New Zealand, and Canada is growing dramatically. There's a lot of anecdotal evidence to suggest that we are no longer attracting the very best. Meanwhile, our share of the global tourism market has fallen from 9 percent at the turn of the century to less than 6 percent today.
Complacency is the enemy of excellence. We appear to have a bad case of it. We need to recover from it.
o American Competitiveness. Only 15 percent of our college students graduate in science and technology. In China, the figure is 50 percent. Traditionally, we've made up our shortage of brains by importing them. The geek may yet inherit the Earth, but post-9/11 they won't do it from here because they can't get visas to do it. As a result, our graduate schools are now short of teaching assistants and our labs are short of engineers. Our companies are responding by moving their R & D and other high tech operations to China and India. In part for this reason, New York has fallen to number three, behind Hong Kong and London, in the number of IPOs by new companies.
These are microcosms of a much larger issue. Our exceptional openness to ideas and to people was what enabled us to lead the global advance of science and technology and to build an unprecedentedly innovative society. Now we are much less welcoming. If we don't do something about this trend, we are in danger of losing our economic leadership, as well as our political leadership of the world. That need not be; we must not let it come to pass.
Let me conclude.
We all grew up in an America that acknowledged its flaws but that was justly admired and respected internationally. Our country then led with the force of its example rather than by the power of its armed forces. I lament the unnecessary passing of that appealingly introspective America. I suppose that brands me too as passé; I admit to being a geezer. But I remain hopeful that I will once again be part of a nation made attractive by its principles, wise by its experience, shrewd by its realism, and prudent by its modesty. Such an America, proficient at arms and the arts of persuasion alike, would again have the world's support, not its animosity. Such an America could hope successfully to manage the challenges of national security in the age of terrorism.
You, who have just taken office, can help America be born again. I congratulate you even as I envy you that opportunity. And I am grateful to have had the opportunity to speak with you. Thank you for your attention.