A Better Deal

Twelve Suggestions for the New U.S. President

By James A. Thomson

James Thomson is president and chief executive officer of the RAND Corporation.

AP IMAGES/RON EDMONDS A passerby peers through an ice sculpture called “Main Street Meltdown” in New York City on October 29, 2008, the 79th anniversary of the Black Tuesday stock market crash of 1929 that led to the Great Depression. The artists, Nora Ligano and Marshall Reese, said the sculpture would take 10 to 24 hours to completely melt down.

Judging by the emerging worldwide consensus, President-elect Barack Obama is about to assume an economic burden second only to the one facing President-elect Franklin Roosevelt upon his entering the Oval Office in January 1933. The test for the new U.S. president will be to offer leadership and financial stewardship worthy of the challenge.

As early as April 2008, an International Monetary Fund document called the economic fallout from the collapse of the U.S. subprime mortgage market “the largest financial crisis in the United States since the Great Depression.” The forecast grew even dimmer this past autumn as banks and brokerages failed, as turmoil roiled Wall Street, and as the credit crisis spread beyond U.S. shores. In October 2008, Deutsche Bank predicted that major industrialized economies in 2009 would suffer their worst slump since the 1930s: “We now expect a major recession for the world economy over the year ahead, with growth in the industrial countries falling to its lowest level since the Great Depression.”

The financial crisis will consume much of the president’s attention and may limit his ability to achieve other important policy goals. But the dire economic circumstances also offer the new administration an opportunity — if not a duty — to rethink old ways of governing and to replace them with ways that are smarter, better, and cheaper.

The dire economic circumstances offer the new administration an opportunity — if not a duty — to rethink old ways of governing.

Eight of the twelve following essays suggest that the nation’s current policies are not the most efficient ways of doing things. While it is unclear whether the proposed alternatives would cost less, they would offer more bang for the national buck. These are changes for the better that we can afford.

Robert Hunter reports that the ratio between military and nonmilitary U.S. national security spending is now 17 to 1. According to Hunter, that is nowhere near the kind of balance required between military and civilian efforts at a time when civilian reconstruction activities are the linchpins of stabilization and counterinsurgency operations.

Brian Jenkins supports numerous shifts in counterterrorist strategy to make it sustainable. Keep the focus on jihadists. Avoid large-scale military buildups when local capabilities can be developed. Reorganize U.S. forces around customized teams of military and civilian specialists. Close Guantanamo. And secure the homeland with infrastructure improvements that are needed anyway.

Seth Jones urges a modest increase in U.S. and NATO forces in Afghanistan, including a redeployment of some U.S. forces from Iraq. But he also urges a new balance between top-down efforts to create a central government and bottom-up efforts to secure local support, working with tribes, subtribes, and clans to help establish order and governance.

While it is unclear whether the proposed alternatives would cost less, they would offer more bang for the national buck. These are changes for the better that we can afford.

Christine Fair wants a better return on the U.S. investment in Pakistan. First, she advises, make U.S. military assistance to Pakistan contingent on its resolute action against militant groups. Meanwhile, expand U.S. aid to the country’s civilian institutions, such as the police, courts, and civil society groups that are key to cultivating a democratic Pakistan.

Turning to domestic policy, Titus Galama and James Hosek see the debate over the U.S. economy lurching from one fix to the next, devoid of a comprehensive plan to spur innovation and competitiveness. Such a plan would allow U.S. leaders to make decisions on related matters, even immigration and education policies, in accordance with a larger vision.

On energy policy, Michael Toman advises the new president to weigh the environmental and economic trade-offs of myriad energy options. He recommends some combination of renewable energies, unconventional fossil fuels, energy efficiency, and conservation.

On education policy, Brian Stecher and Laura Hamilton argue for greater flexibility in the accountability systems associated with the No Child Left Behind Act. Being more responsive to local conditions could reduce local opposition to this federal investment.

Finally, there are few better examples of wasteful national spending than the U.S. health care system, and few policy areas have been more resistant to reform. To help break the logjam, Elizabeth McGlynn and Jeffrey Wasserman offer a tool to compare the effects of proposed reforms across multiple dimensions affecting numerous interest groups.

McGlynn and Wasserman have begun to do for health care what needs to be done for all areas of public policy. It is time to take stock of the options, to cash out the losses, and to make wiser investments in the public interest. The eight essays cited above — along with the accompanying essays on Iraq, Iran, Turkey, and nuclear proliferation — propose some of the ways in which the new U.S. president can offer America a better deal.