MOOCs, MARKs & Economic Discrimination

On-line education has recently received considerable publicity. Kahn Academy’s libraries of more than 3,000 videos have been introduced into some public schools. More recently, highly regarded universities have entered the on-line education market. The leader in the new on-line university courses, known at Massive Open Online Courses or MOOCs, is Coursera.

Coursera was started by Stanford, Michigan, Penn and Princeton. Another 29 universities have joined their organization. In 2013, Coursera has 3.5 million people around the world taking 370 courses. These courses are free, but most do not offer credit. By 2018, Coursera expects to offer 5,000 courses. . . Harvard and MIT joined together to form edX, which is the second largest provider of MOOCs. Despite their growth, MOOC organizations have not developed a viable business model, but that is only a matter of time.

Questions about the future of education have emerged as MOOCs have appeared on the market. Will MOOCs replace some classroom courses? Will they replace most classroom courses? Will they change the nature of classroom courses? Three things are virtually certain. First, the quality of MOOCs will evolve and improve over time. Second, MOOCs will dramatically reduce the cost of education. Third, MOOCs will have a profound impact on our educational institutions.

MOOCs offer some distinct advantages over classroom education. Today, the biggest advantage is cost. Penn offers a three-hour on-line calculus course for credit for $178. Lower costs will make university education affordable to a much larger segment of the population, both in the United States and around the world.

MOOCs will, in time, improve the quality of their courses. The best professors will develop courses that can be widely distributed. Students will see less of a professor lecturing and more photographs, videos, graphs, charts, etc., which will improve the learning. In the future, professors may develop the text for the lectures and actors may provide the voices in a wide range of languages.

Education can be individualized with students learning at their own speed. Feedback will be much faster. Improvements in making the courses more interactive will be developed.

MOOCs also have significant disadvantages. The primary disadvantage is they lack the personal interaction with instructors and classmates. Many graduates give examples of teachers provided them with the lessons, the understanding and the encouragement to become successful. Some students may lose motivation without a classroom setting. In addition, MOOCs are best suited to replace lecture courses and not as well suited to replace lab courses.

The America university system is unquestionably the best in the world. So, why should changes to the system be considered? It is a very restrictive system. A bachelor’s degree at most state universities costs more than $100,000. Only 58% of students enrolling in a four-year bachelor’s program graduate in six years. The percentage is higher for private, non-profit schools than for public universities. For-profit institutions have a dismal graduation rate of 28%.

In addition, there is a high correlation between family income and college attendance. Poor students with high SAT scores are far less likely to complete college that students from wealthier families with lower SAT scores. This is de facto economic discrimination. Lowering the cost of education is even more important in emerging countries.

Universities need to find a way to incorporate MOOCs into existing classes where appropriate because they can improve instruction and reduce costs. In addition, the university system should develop a parallel programs based primarily on MOOCs for students who are excluded from today’s educational system due to cost. A bachelor’s degree for $10,000 would be a good objective.

The expansion of on-line courses may be disruptive to some universities. The technology is likely to reduce the required number of tenured professors, as an example. But universities should not take a struthious position. Years ago, Kodak invented and patented the digital camera, but did not manufacture them because Kodak was in the film business. Today, Kodak is in bankruptcy.

Universities may want to consider similarities between the education industry and the transportation industry as they engage in risk management. Horses were the best form of transportation for a couple of millennia, just as classrooms have been the best form of education for centuries. In the early part of the 20th century, when automobiles first appeared on the market, people argued they would not replace horses. Horses were more reliable, horses responded to verbal instructions and owners had a personal bond with their horses. In less than 50 years, of course, automobiles replaced horses to become the dominate form of personal transportation.

By 1929, there were 1,800 automobile manufacturers in United States. Economic Darwinism has reduced that number to fifteen today – three domestic and twelve foreign companies.

Although change may occur slowly in the field of education, change occurs rapidly in the field of technology and MOOCs push education further into the field of technology. Consider that 25 years ago, there was no public Internet, no web sites, no search engines, no email, no laptops, no notebooks, no smart phones, no Facebook, etc. In the last 25 years, technology has significantly impacted our lives and the way we interact with people. Changes in the next 25 years are likely to be more dramatic.

Not only will rapidly changing technology impact education, but universities will be entering into the world of price competition. This will be more like the world of business where quality and price are the most significant determinants of success and even survival.

University Risk Management Committees should evaluate how MOOCs will impact their universities. Universities should develop strategies and tactics that effectively employ the new technologies. The significant risk is that MOOCs will produce MARKs, Massive Amounts of Road Kill.

Deficits, Entitlements, and Tax Expenditures

Much of the focus on reducing Government spending is directed at two entitlement categories – Social Security and Medicare. Virtually absent from this discussing is the revenue generated from payroll taxes that supports these entitlements. And, far too little attention is focused on Tax expenditures, which, in the aggregate amount to $1 trillion and have no tax designated to support them.

Social Security in 2011 cost $736 billion. Income was $805 billion, including $691 billion from payroll taxes and $114 billion in interest earnings, as reported by the 2012 Annual Report of the Board of Trustees. Hence, for the year, Social Security had a positive cash flow of $69 billion.

Medicare total expenditures were $549 billion in 2011. Income totaled $530 billion, including $515 from payroll taxes and $15 from interest earnings, according to the 2012 Annual Report of the Boards of Trustees. Hence, Medicare had a negative cash flow of $19 billion.

The two combined had a positive cash flow of $50 billion. A positive cash flow of $50 billion is not a crisis. The problem with Social Security and Medicare is in the future; it is not today. One solution is to raise the payroll taxes that support Social Security and Medicare. This solution allows citizens to pay for the programs they like, but discussions of the problem have focused mostly on cutting these entitlements. (The age for starting Social Security needs to be increased, but that is another subject.)

Tax expenditures include a thousand or so tax deductions, credits and subsidies that in the aggregate amount to $1 trillion. If they were all eliminated, they would nearly eliminate the annual deficit, which is about $1.2 trillion.

Perhaps the most egregious of these tax expenditures is the earmark that entitles hedge-fund managers to pay a maximum tax rate of 15% on their income. Last year, the 25 highest paid hedge-fund managers earned, in the aggregate, more than the aggregate of the 500 CEOs of the Fortune 500 companies. Nobody would argue that these hedge-fund managers contributed more to America that the CEOs of the Fortune 500. Nevertheless, they are entitled to tax breaks not available to other Americans. Hedge-fund managers make significant contributions to the campaigns of members of Congress who are involved in taxation.

The list of tax expenditure entitlements very long and very poorly publicized. For example, the list includes entitlements for Nascar, the tackle-box industry and Eskimo whaling captains.

In an article on tax policy and tax expenditures, The Economist magazine (Jan. 21-17, 2012, page 14) argued: “It would be far better to close or limit loopholes and deductions, currently worth 7% of GDP, which distort behavior (by, for example, encouraging people to take out big mortgages) and mostly benefit the affluent.”

The American public, in general, does not understand the significance of tax expenditures and the television media has done little to enlighten anybody.

Reducing Healthcare Costs: The Impossible Dream

Major countries among the developed nations have found healthcare solutions that cost
less than the American system of healthcare and produce longer life expectancies. Most spend half or less per capita than the US. All have longer life spans. Statistics from these countries appear below. The table below show the per capita healthcare expenditures and the life expectancy for selected countries.

United States 6,096 78.5

Canada 3,173 81.5

Germany 3,171 80.2

Australia 3,123 81.9

France 3,040 81.4

United Kingdom 2,560 80.2

Italy 2,414 81.9

Japan 2,293 83.9

Spain 2,099 81.3

Healthcare Expenditure source: United Nations Human Development Report, 2007

Life Expectancy source: CIA World Factbook 2010

Reuters reported (6/13/2010), “Americans spend twice as much as residents of other developed countries on healthcare, but get lower quality, less efficiency and have the least equitable system, according to a report released on Wednesday. The United States ranked last when compared to six other countries — Britain, Canada, Germany, Netherlands, Australia and New Zealand, the Commonwealth Fund report found.”

According to World Press (6/20/2009), the US ranks 37^th in healthcare quality and efficiency. According to a Harris Poll, Canadians are more satisfied with their healthcare than Americans. The Harris Poll (June 2009) of Canadians found that 91% believed their healthcare system was “superior” to the U.S. system. Another Harris Poll (July 2008)
revealed that only 45% of Americans believed they had “the best healthcare system in the world.” The Harris Poll found that 70% of French adults and 59% of British adults believed their countries’ healthcare systems were “the envy of the world.” Among the ten nations polled, the U.S. had the highest percentage of respondents who felt there was “so much wrong with the healthcare system, we need to completely rebuild it.”

Some evidence supports the statistics. A 2012 Novartis/McKinsey study revealed that the French population has a higher rate of lung disease than Americans due to higher smoking rates. Yet the French spend one-eighth as much on treating lung disease and have severity and fatality rates one-third of those in the US. Early detection is the key.

There are examples of cost-effective healthcare in this country. The Mayo Clinic is one of the lowest cost healthcare providers in the nation. They achieve low costs through extensive use of technology and demanding application of “best practices.” Unfortunately, many American healthcare providers have resisted technology and do not want to be forced to use “best practices.”

When Americans are polled on how satisfied they are with their health insurance,
people on Medicare are more satisfied with Medicare than people with private
healthcare insurance. The “Death Panel” concept argues that government bureaucrats decide what procedures are approved and what are denied. Currently, insurance company bureaucrats make this decision. The salaries and bonuses of insurance bureaucrats
are improved by denying procedures, since denial improves the insurance companies’ profitability. Government bureaucrats base decisions on medical information; profitability and bonuses do not enter their decision-making.

Clearly, other countries have found better solutions to healthcare. Recent polls show that 70% of French believe they have the best healthcare system in the world, while only 45% of Americans believe they have the best. In addition, 91% of Canadians believe they have a better healthcare system than the US.

In this country, the healthcare industry has vested interests in keeping healthcare costs high and well-funded lobbies supporting these vested interested. In 2012, the healthcare industry spend $3.3 billion on lobbying, four times as much as the defense industry. There were 2,374 registered healthcare lobbyists, 23 for every member of Congress.

The organization, Public Citizen, reported that the pharmaceutical industry and HMOs
spent $141 million and hired 952 individual lobbyists to push Congress to pass the Medicare Prescription Drug Act of 2003. The lobbying worked. The legislation passed and included a provision that requires Medicare to pay full retail price for prescriptions. The Veterans Administration has negotiated a 42% discount on drugs, but this is not
available to Medicare. As result, the Medicare Prescription Drug Act of 2003 costs more than Obamacare, the TARP and the Stimulus combined according to the Congressional Budget Office.

The biggest barriers to reducing healthcare costs in the U S are the lobbies, corporations and special interests in the healthcare industry. They fund the election of representatives in Congress who will support their positions. Consequently, any significant reduction in healthcare costs remains the impossible dream.

Obamacare: The Mandate and the Ironies

The concept of the healthcare mandates evolved from conservative Republican thinking. That fact is indisputable and generally understood. Self-reliance and personal responsibility were core Republican values. Requiring that all citizens take responsibility for their own healthcare through healthcare insurance flows from these core Republican values.

History of the Mandate

In 1974, President Richard Nixon proposed the Comprehensive Health Insurance Plan. The plan would mandate that “every employer” provide a “Comprehensive Health Insurance Plan” to all full-time employees.

The Emergency Medical Treatment & Active Labor Act (EMTALA) was passed in 1986 by a Democratic House and a Republican Senate and signed into law by Ronald Regan. It was
an unfunded mandate that required hospitals participating in Medicare (nearly all) to provide emergency care to anyone who needed it, including illegal immigrants, regardless of ability to pay for the service. It was the first step in universal healthcare.

In 1989, Stuart Butler of the conservative Heritage Foundation published a plan called, “Assuring Affordable Health Care for All Americans.” This plan mandated that all
households obtain adequate health insurance. Butler believed that healthcare protection is the responsibility of individuals, not businesses.

In 1991, the renowned conservative economist, Milton Friedman, advocated, in a Wall Street Journal article, “a requirement that every U. S. family unit have a major medical insurance policy.”

In 1991, economist Mark Pauly created a proposal, which included a mandate, for President George H. W. Bush. His proposal was turned into a Congressional bill two years later.

In 1992, the Jackson Hole Group (Paul Ellwood, Alain Enthoven & Lynn Etheredge) published the “Jackson Hole Initiatives for a 21^stCentury American Health Care System.” It included employer mandates and was an alternative to the Clinton healthcare
proposal, which the group strongly opposed.

In 1993, Republicans in Congress introduced the Health Equity & Access Reform Today Act (HEART Act). It proposed an individual mandate and health insurance vouchers for low-income people. The 19 Senate Republican co-sponsors included John Chafee, Bob Dole, Chuck Grassley, Orrin Hatch, Richard Lugar, Alan Simpson and Arlen Specter. House Minority Leader, Newt Gingrich supported the HEART Act. Republicans believed that the individual mandate was more market friendly than an employer mandate.

Mitt Romney’s healthcare plan for Massachusetts was developed with assistance of the conservative Heritage Foundation (Bob Moffit & Ed Haislmaier). It included both
an individual mandate and an employer mandate, although Romney opposed the
employer mandate. Romney told reporters, “It’s the ultimate conservative idea, which is that people have responsibility for their own care, and they don’t look to government if they can afford to take care of themselves.”

The first irony is that when the individual mandate, conceived by Republicans, was proposed by a Democratic President, Republicans reversed their position and opposed it. Suddenly, the mandate became a violation of individual liberty. In this case, Republicans abandoned their core values of self-reliance and personal responsibility.

Consequences from Lack of Health Insurance

A 2009 Harvard study linked deaths of Americans to the lack of health insurance. The New York Times (9/17/09) reported, “Researchers from Harvard Medical School say the lack of coverage can be tied to about 45,000 deaths a year in the United States.” The
study suggested two primary reasons for the deaths. The first was the difficulty in finding
healthcare services for the uninsured. The second was the fact that uninsured people rarely receive treatment for chronic conditions, such as high blood pressure and diabetes.

More people have died from lack of healthcare coverage in the US each year than have died in the Syrian civil war. Ironically, critics of Obamacare often argue that the US should do more to save Syrian lives, while allowing Americans to die in greater numbers.

A study released by the American Journal of Medicine reported that 62% of bankruptcies were tied to medical expenses. That amounts to approximately 900,000 bankruptcies per year due to medical bills. The study’s lead author, Steffie Woolhandler, MD at the Harvard Medical School, stated, “Unless you’re a Warren Buffett or Bill Gates, you’re one
illness away from financial ruin in this country. If an illness is long enough and expensive
enough, private insurance offers very little protection against medical bankruptcy, and that’s a major finding in our study.”

Insuring Pre-Existing Conditions

Some health insurance is available in some states for people with pre-existing conditions, but it is very expensive. This health insurance generally does not cover the pre-existing conditions, such as heart disease, diabetes, cancer, stroke, back problems, AIDS and many others. Implementing a mandate increases the size of the insurance pool and
includes younger people who have fewer claims. This helps offset the cost of insuring people with pre-existing conditions.

Congressman Paul Ryan has recommended replacing Medicare with a voucher that would allow senior citizens to purchase their own healthcare insurance. Most people over 65 years old either have a pre-existing condition or will have one before they die. Insurance will be unavailable to this group at any reasonable price.

The Probable Solution

In most of the developed world, healthcare is considered a right rather than a privilege. Eventually, a majority of Americans will also come to view healthcare as a right instead of
a privilege. Germany, as an example, has had universal healthcare since 1883. Germany
pays half as much for healthcare per capita as the U S and Germans have a longer life expectancy than Americans.

Essentially, there are two realistic approaches to provide universal healthcare for everyone: (1) tax everybody, healthy & sick, and use this money to provide healthcare,
e.g., Medicare & Medicaid, and (2) mandate that everyone to buy insurance.

Repealing the Affordable Care Act would deny health insurance coverage to 30 million Americans. The alternative for universal healthcare becomes, by default, the single-payer system, i.e., Medicare for all Americans.

While it would have to be paid for with taxes, some cost benefits occur. According to the
Congressional Budget Office, Medicare’s administrative costs are less than 2% of expenditures, while private insurance has administrative costs of 11% plus a profit of 7%. Private insurance companies have certain costs that Medicare does not incur. These include: marketing costs, sales expense, lobbying, executive bonuses, etc.

The most improbably irony is that the political conservatives may be the driving force in bringing about the healthcare solution that political liberals desire – Medicare for everyone.

Education, Immigration & American Competitiveness

The United States, unquestionably, has the best higher education system in the world. In 2010, the US attracted 690,923 students to American universities from foreign countries. American immigration laws require that most of them must leave the United States after they complete their education. The US has an annual limit of 140,000 green cards per year with a quota maximum of 7% from any one country, i.e., 9,800.

The countries with the highest percentage of students who must leave the US are China, with 127,628 students studying at our universities, and India, with 104,897 students in the US. India has a backlog of 210,000 applicants in one green card category (EB-3). It would
take 70 years to clear if no new ones were added. Chinese immigrants would take 20 years to clear.

There is a critical shortage in this country of people with advanced degrees in science, technology, engineering and mathematics (STEM). In most fields of engineering,
more than half the people who earned PhDs are foreign nationals. Most of them are required to leave the United States after graduation. This immigration policy is accelerating the rise of China and India and reducing America’s competitiveness.

American companies, like Microsoft, have created research centers in Vancouver, British Columbia, because Canada accommodates immigration of people with technical degrees. More than 40% of Vancouver’s residents are now Asians. American companies have also created research centers in India and China.

The Financial Times (10/13/11) stated. “If you had to devise a perverse economic policy, it would be difficult to do much worse than this. First, invest heavily in research – the NIH alone ploughs $32 billion annually into medical science – and build world-class universities with state-of-the-art facilities. Second, lure the brightest young scientists
to the USA to study at the cutting edge. Last, send them home with that knowledge.”

To help retain skilled foreign nationals in the United States, Congress should establish an exemption from the employment-based green card quotas for individuals who earn a master’s degree or higher from an American university.

Who Will Lead Us Out of Recession?

Who Will Lead Us Out of the Recession?

Yea, though we walk through the valley of the shadow of debt?

Should we fear no evil? Who will lead us?

And, when will the Dow Jones Industrials runneth over?

Economists are reluctant to predict recessions for fear of creating self-fulfilling prophecies. Nevertheless, the August 6-12 issue of The Economist raised the probability of a double-dip recession to 50%. And, we have not recovered from the first recession. American output remains below the 2007 peak, and per capita Gross Domestic Product (GDP) is the same as the second quarter of 2005. We are in the sixth year of the lost decade.

The consumer sentiment, reported on August 12^th, was the lowest in more than 30 years. London’s Financial Times (8/12/11) reported that 77% of businesses surveyed expected the global economy to be the same or worse in the next six months. Among the 23% who expected the global economy to be better were Asian companies. In 2012, the National Bureau of Economic Research (NBER) will likely report that the second recession began this quarter. It will limited to the developed nations.

The developed nations – principally the United States, the European Union and Japan – account for about 60% of global GDP. These nations are all burdened with excessive
debt and insufficient leadership. Short-term government spending would spur economic growth. Cuts in spending will place a drag on economic growth. Politics favors cuts, which will exacerbate the economic situation.

Leadership is the other problem. The developed world is led by the odd couple: Barack Obama and Angela Merkel. Both have unique characteristics. Obama is the first black American to be president. Merkel, who was born in East Germany, is the first female to be chancellor. Obama is an attorney and Merkel is physicist. Both have strong intellectual capabilities and both are deliberative thinkers.

Unfortunately, both act more as a mediator than a leader at a time when strong leadership is necessary. The center-right Financial Times (8/5/11) stated, “Nothing can be settled in the Eurozone without the approval of the German chancellor. The president’s signature was required on an agreement to life the US debt ceiling. Yet neither has shown anything much resembling leadership in shaping the outcomes.”

On August 11, 2011, eight Republican presidential candidates debated in Ames, Iowa. They were asked if they were president, would they approve or veto a deficit-reduction
bill that included a tax increase spending cuts equal to ten times the amount of the tax increase. All eight said they would veto it. They would rather go against American public opinion than against Grover Norquist (Americans for Tax Reform), revealing their lack of leadership on this critical issue.

Who, then, will lead us out of recession? By default, it will have to be the emerging
market nations, particularly the Asian nations. In 2009, to combat the “Great Recession,” they engaged in massive fiscal stimulus programs in transportation, education, energy and housing. In 2010, China, India, South Korea, Taiwan and Singapore grew an average rate of more than 10%. Nevertheless, because the emerging market countries represent a smaller share of global GDP, recovery will be slow.

The rise of China and other emerging market countries is inevitable. A decade ago, the consensus forecast was that China would pass the US in GDP by the middle of this
century. Due primarily to America’s and the EU’s self-inflicted economic damage, the consensus is that China will pass the US and the EU in nominal GDP by 2020. The IMF predicts China passing both in purchasing power parity GDP by 2016.

American political environment and resulting policies are accelerating the power shift to Asia. Although the shift in military power will be slower, global power is more importantly the dominance over ideas and agendas. The impact of this power shift will be dramatic and profound.

Blessed are the emerging markets for they shall inherit the earth.

Welcome to the 21^st century.

Debt, Deficits & Alternatives

There are three means of reducing deficits: (1) reduce spending, (2) increase taxes and (3) expand economic growth. Discussions on the debt ceiling and the resulting legislation focused on the first two and completely ignored the third.

If taxes and spending remained unchanged and the US economic growth rate was 3.9%, the deficit would drop from 100% of GDP to 83% of GDP in ten years. If the growth rate were only 1.8%, deficits would increase to 144% of GDP in ten years. The economic growth rate has enormous impact on the deficit. The US growth rate was 0.8% in the first half of 2011.

The primary factor in balancing the budget during the Clinton presidency was an economic growth rate of 4.0%. The greatest threat to the US Government deficit
is a sustained period of slow growth. The debt ceiling package passed by Congress this month increases the probability of a sustained period of slow economic growth.

Despite what some politicians say repeatedly, TARP and the Economic Stimulus Package prevented the recession from becoming worse and unemployment becoming higher. Credible econometric models predicted that the unemployment rate would have risen to more than 15% without those programs. Dan Akerson, GM’s CEO, said TARP saved over one million jobs in the auto industry and GM is again the largest auto producer in the world. The Stimulus Package saved millions of jobs, particularly at the state level.

Unfortunately, the Stimulus Package was far too small for the magnitude of the economic problem. Also, unfortunately, President Obama said the Stimulus Package would keep
unemployment under 8.5%. Despite his forecasting error, the Stimulus Package had positive results. Nevertheless, another Stimulus Package is unlikely because so many politicians called the first package a failure.

Asian countries responded the recession quite differently. To counteract the recession
they engaged in massive fiscal stimulus programs in transportation, education,
energy and housing. The resulting economic growth rates in 2010 were as follows:

China grew 10.3%
India grew 8.2%
South Korea grew 6.1%
Taiwan grew 10.8%
Singapore grew 14.5%

A significant fiscal stimulus program would stimulate US economic growth, reduce unemployment and ultimately shrink the deficit. Instead, we are on the path of cutting
spending, which will keep unemployment high and revenues low, and, therefore, perpetuating large deficits.

Unfortunately, we are led by people who engage in static, two-dimensional thinking, while we live in a dynamic, three-dimensional world. The debt ceiling agreement increases the
probability of another recession. We may be repeating the political mistakes of 1937, which will prolong the Great Recession. This time, there is little prospect for a large
fiscal stimulus package, like World War II, to solve the problem.

Osama bin Laden & Islamic Terrorism

Ending Islamic Terrorism

The death of Osama bin Laden will not bring an end to Islamic terrorism. The factors that motivate terrorists remain in place. Four issues motivate certain people to commit terrorist acts against the United States. When these issues are resolved, the threat of terrorism will drop dramatically. The four issues are: (1) the Israeli-Palestinian situation, (2) the Kashmiri situation, (3) American support for corrupt Muslim dictators and (4) the American military killing people in Muslim countries. There are solutions to all four issues.

The Israel-Palestinian conflict can be resolved equitably with a two-state solution based on the Geneva Initiative, which was negotiated between Israelis and Palestinians. What has been missing is the leadership to implement the agreement.

Prior to 9/11, Al Qaeda’s primary business was training terrorists to fight in Kashmir. Kashmiri’s were promised the right to determine their future through elections. Elections on Kashmiri on sovereignty need to be held and results fairly implemented.

Next, the US must resolve its military operations in Iraq and Afghanistan and withdraw military forces from those countries. The US is on this path in Iraq. The path needs to be clearly established for Afghanistan.

Finally, corrupt Muslim dictators must be replaced by leaders who will work to meet the needs of their citizens. This process is underway in some of the countries in the Middle East.

These actions would eliminate 99% of the motivation for Islamic terrorism. Terrorists will not engage in suicide attacks when it is pointless to do so.

Anghanistan’s History & America’s Options

Afghanistan’s History & America’s Options

The prospects for “winning” in Afghanistan have diminished and the US presence may now be counterproductive to American security. The need to review objectives, strategies and tactics is compelling.

The stated objective is to keep Al Qaeda from returning to Afghanistan and setting up sanctuaries in that country. Afghanistan is the easiest Muslim country to kill and capture Al Qaeda members, so the objective should be to attract them to return to Afghanistan.

Summary

The US once supported the mujahedeen, in “Charlie Wilson’s war” against the Soviets. The Soviets supported the central government in Kabul from the Soviet headquarters at Bagram Airbase outside of Kabul. Now the US supports the central government in Kabul from the Bagram airbase fighting against the mujahedeen who have morphed into Taliban.

The US has 100,000 troops in Afghanistan. NATO countries have 30,000. There are 90,000 trained troops in the Afghan National Army. Combined, this totals 220,000 troops. The Taliban have 30,000 fighters and Al Qaeda has, at most, 100 people in Afghanistan.

The Taliban are divided into two broad groups – the Pakistani Taliban and the Afghan Taliban, some of whom are in Pakistan. The Pakistanis oppose the Pakistani Taliban, but not the Afghan Taliban, who were and are their allies against India. A majority of Pakistanis view America as their enemy.

The Afghan Taliban are not a threat to the United States and Al Qaeda is very unlikely to return to Afghanistan if the US leaves. The primary justification for our military operations in Afghanistan is based on the assumption that fighting the Afghan Taliban is the same as fighting Al Qaeda. This assumption is not valid.

The US military presence in Afghanistan motivates lunatics and extremists to commit terrorist attacks against Americans. Consequently, our presence is counterproductive to American security.

The US should change tactics, reduce the military presence in Afghanistan and fight terrorists in South Asia the same way we fight terrorists in other parts of the world – with intelligence, Special Forces and drones. To explore these assumptions and conclusions, we will first begin with Afghan history.

History

Afghanistan has been engaged in a civil war almost continuously since the Saur Revolution in April 1978. In broad terms, the civil war has been between two groups – the “fundamentalists” and the “traditionalists.” The fundamentalists consist primarily of the rural religious conservatives (by Afghan standards), while the traditionalists are more urban, more secular and more liberal (again, by Afghan standards). The Mujahideen and the Taliban are part of the fundamentalists group. The US has supported both sides in this civil war at different times. Some historical perspective may help in understanding the current situation.

On July 17, 1973, General Mohammad Daoud Khan overthrew the monarchy of Mohammad Zahir Shah, who had served as king for forty years. It was a bloodless coup and Zahir Shah went into exile in Italy. Daoud Khan declared Afghanistan a republic with himself as president. He was a strong advocate of Pashtun irredentism, i.e., the creation of a greater Pashtunistan, which included Pashtun areas of both Pakistan and Afghanistan.

By 1978, the Afghan Communist Party, the People’s Democratic Party of Afghanistan, (PDPA) was ten years old. It was split between an extremist group led by Nur Mohammed Taraki and a moderate group led by Babrak Karmal, who was favored by the Soviet leaders. In early 1978, Daoud Khan’s government killed Mohammed Akbar Khaibar, a prominent member of the Communist PDPA. Most party leaders were arrested.

Hafizulla Amin (educated at Columbia University) and members of the military wing of the PDPA staged a successful bloody coup in April 1978, known as the Saur Revolution. (Saur means, “April.”) The head of the PDPA, the extremist, Nur Muhammad Taraki, was released from prison and assumed the position as President of Afghanistan. On April 27, 1978, during the coup, Daoud Khan was executed. Taraki arrested and executed a large number of opponents, which led to strong opposition to his new government.

Taraki requested Soviet help. In a prophetic statement, Alexei Kosygin replied to Taraki, “We believe it would be a fatal mistake to commit ground troops. If our troops went in, the situation in your country would not improve, On the contrary, it would get worse.”

Taraki reportedly made several attempts on the life of Hafizulla Amin. The final attempt backfired and Taraki was executed in September 1979. Amin assumed the presidency. The PDPA attempted to liberalize Afghanistan society, stressing education for both men and women, introducing widespread literacy programs, banning the selling of brides and forced marriages, and raising the minimum age for marriage. These policies were supported by the more liberal urban population, the “traditionalists.” All of these policies were opposed by the more religious rural conservatives, the “fundamentalists.”

Amin carried out his own purges of the PDPA. Known by conservative Afghans as the “atheistic infidel,” Amin engaged harsh tactics, including arrests and executions. His opponents made several attempts on his life. His tactics became too severe for his Soviet allies, who had invested heavily in Afghanistan and who concluded Amin was destabilizing the country. On December 24, 1979, the USSR invaded Afghanistan. On December 27, 1979, the KBG stormed the Presidential Palace and killed Amin, falsely claiming he was an agent of the CIA. The Soviets installed Babrak Karmal as the new head of government.

Karmal, a moderate member of the PDPA, promised an end to executions, democratic elections and protection for individual freedom and personal property. The civil war continued. The US provided financial and military aid to the mujahideen. In 1981 aid through Zia’s Pakistan began to increase due to the efforts of Texas Congressman, Charlie Wilson, and CIA officer Gust Avrakotos, as depicted in the movie, “Charlie Wilson’s War.” However, the first stinger missiles did not arrive until April 1987. That was two months after Gorbachev told the Politburo that the USSR must prepare to withdraw from Afghanistan and just three months before the Soviets publicly announced their decision to withdraw. The Soviet withdrawal was announced on July 20, 1987 and was completed on February 15, 1989.

By this time the Soviets had blamed Karmal for the lack of success. In November 1986, they replaced him with Mohammad Najibullah, who had been the head of the KHAD, the secret police.

Najibullah’s government fell and in March 1992 he resigned. An interim government was formed that promised elections. Najibullah fled to a UN compound. The civil war continued and the country descended into ungoverned chaos. Fighting was almost continuous and included infighting among former allies and various mujahideen groups.

When the Taliban, led by Mullah Mohammad Omar, captured Kabul in 1996, Najibullah was tortured, castrated, and then killed and hung from a traffic light post with his penis cut off and stuffed into his mouth. Girls’ schools were closed. Women were banned from working outside the house. Music, television and sports were banned.

The US supported the rural religious fundamentalists, the mujahedeen, in “Charlie Wilson’s War” against the Soviets. According to Husain Haqqani, Pakistan’s Ambassador to the US, the mujahedeen morphed into the Taliban. Many mujahedeen joined the Taliban. Some Taliban are children of the mujahedeen. As an example, Jalaluddin Haqqani was a senior mujahedeen fighter who received money and arms from the C.I.A in the 1980s. In the 1990s, when the Taliban ran Afghanistan, he was the governor of Paktia Province. His son, Siraj Haqqani, is the strongest Taliban warrior in Afghanistan today and his fighters have posed the biggest threat to American forces. Following 9/11, the US changed sides, fighting against the Taliban, those rural religious fundamentalists, who were supported by the US two decades earlier.

Recent documents revealed that US helicopters have been shot down by heat seeking missiles, possibly provided by the US to the mujahedeen. The missiles have proven to be less accurate than those depicted in Charlie Wilson’s war. The US military had reported that these helicopters were shot down by ground fire.

Ironically, when the US changed sides, supporting the more liberal urban people representing the central government, the Americans adopted Bagram Airbase outside of Kabul as their headquarters. Bagram was used by the Soviets as their headquarters when they supported the central government in Kabul.

Interestingly, before the Soviet withdrawal, Gorbachev tried a surge, based on the advice of military commanders who thought one last push would break the mujahedin. After eight years the Soviets concluded that they could not achieve anything resembling a victory in Afghanistan. After a similar time period, Americans may now be learning the same lesson. George Santayana famously said, “Those who cannot remember the past are condemned to repeat it.” (Santayana also said, “Only the dead have seen the end of war.”)

Al Qaeda

Osama bin Laden and Al Qaeda were forced to leave Sudan in 1996 by the Sudanese government due to conditions attached to American foreign aid. Afghanistan was their choice for relocation, but they lost many of their members because Afghanistan was such an undesirable place to live. Previously, Al Qaeda had played a minor role in supporting the mujahideen against the Soviets. Al Qaeda engaged in three battles, losing the first two but claiming victory in the third, which occurred as the Soviets were retreating from Afghanistan. Al Qaeda’s primary activity in Afghanistan was training terrorists for Pakistan to fight in Kashmir.

Operating from Afghanistan, Al Qaeda directed the 9/11 attacks on the US. Osama bin Laden gave three reasons for this attack. The first, he said, was the continued existence of the Americans Air Force base in Saudi Arabia. It was created to support the first Gulf War, but not closed at the end of that war. The base was near Islam’s two holiest sites – Mecca and Medina. (This base was removed after 9/11 and the invasion of Iraq.) Second were the injustices against Palestinians carried out by Israel supported by US. He also included the 1982 invasion of Lebanon by Israel supported by the American 6^th fleet. The third reason given was American support of corrupt Arab monarchs who, he said, embezzle wealth from the people.

October 7, 2001, in response to 9/11, the US military along with the British launched “Operation Enduring Freedom,” an invasion of Afghanistan. On November 13, 2001, the Taliban fighters abandoned Kabul and on December 7, 2001, the Taliban stronghold of Kandahar fell. Seventeen months after the invasion, on March 20, 2003, the US, along with three other countries, invaded Iraq in “Operation Iraqi Freedom.”

As the US reduced forces in Afghanistan, the Americans assigned several Afghan tribal leaders with the task of killing or capturing Osama bin Laden and Mullah Mohammed Omar. The leaders were given suitcases filled with cash for this assignment. Osama bin Laden and Mullah Mohammed Omar both escaped. The tribal leaders kept the cash.

Lawrence Wright (“Looming Tower”), a leading expert on Al Qaeda, said that 80% percent of Al Qaeda had been killed or captured. At that point in time, the US redeployed military assets from Afghanistan to the Iraqi theater. In a news conference, President Bush stated, “It is not all that important that we capture Osama bin Laden.” The redeployment of military assets to Iraq prevented the US from killing or capturing Osama bin Laden and allowed most of the remaining Al Qaeda (50 to 100 people) to move across the border into Pakistan.

Lawrence Wright suggested that if we had completed the effort against Al Qaeda, there would not have been a Global War on Terror. The redeployment allowed Al Qaeda to survive and the invasion of Iraq resulted in significant gains for Al Qaeda in both funding and recruiting. Al Qaeda became a well-funded, multi-national organization carrying out attacks in Spain, England and Indonesia.

The invasion of Iraq also provided some obvious, but unintended, benefits for Iran. It removed Iran’s worst enemy, Saddam Hussein, and converted Shiite-dominated Iraq into Iran’s closest ally. It also motivated Iran and North Korea, the other two countries in the “Axis of Evil,” to restart their nuclear programs to help protect themselves from invasion.

The leaders of Al Qaeda are now in Pakistan and these leaders are not likely to return to Afghanistan. It is easier for the US to capture and kill them in Afghanistan. They are safer in Pakistan. The Afghans do not want Al Qaeda because they attract foreign military force. Al Qaeda does not want to leave Pakistan because living conditions for Al Qaeda members are much better in Pakistan, including food, water, electricity, banking, communications, etc.

The Taliban

The Taliban in Pakistan are divided into two large groups and many sub-groups within the larger groups. Mostly in Waziristan, the two large tribes are the Mehsuds and the Wazirs. Mehsuds consider Wazirs slow-witted, mercantile and untrustworthy. Wazirs consider Mehsuds as vagabonds and cattle rustlers.

The Pakistani Taliban are led by the Mehsuds. Compared to the Wazirs, they have very little interest in Afghanistan. The Mehsuds have carried out 300 suicide attacks in Pakistan. Benazir Bhutto was, allegedly, one of their victims. Faisal Shahzad, the New York Time Square terrorist, was allegedly trained by the Pakistani Taliban, although the Pakistani Taliban have disavowed any connection. The Pakistani military has focused their attacks on the Pakistani Taliban, not the Afghan Taliban. On rare occasions, and only due to US pressure, have they focused on the Afghan Taliban. Historically, the Pakistanis viewed the Afghan Taliban as their allies against India in the Kashmiri conflict. Recent polls show that a majority of Pakistanis view America as their enemy.

The Pashtuns are the largest ethnic group in Afghanistan, comprising approximately 42 percent of the country’s population. Most of the Taliban in Afghanistan are Pashtuns. Pashtuns make up only 5% of the Afghan National Army (ANA). Only about 20% of the ANA speak Pashtun. Hamid Karzai is a Pashtun.

The Afghan Taliban are little threat to the US. Their objective is to control and govern Afghanistan. (Al Qaeda, on the other hand, is a Jihadist organization whose objective is to create a new Islamic caliphate that will rule the Muslim world and beyond.) The Taliban simply want the US to leave Afghanistan. They dislike Al Qaeda referring to the Arabs as “camels,” a derisive term. They are joined together by a common enemy, the United States.

Risks to American Security

The primary risk of a terrorist attack against the US comes from extremists and lunatics. A large American military presence in Muslim countries fuels anti-Americanism, promotes the growth in the number of terrorists and fosters increased funding for Islamists and Jihadists. Every terrorist attack by Muslims has been motivated by Western military presence in Muslim countries.

New York City & Pentagon, Sep 11, 2001: Motivated by US maintaining a military base near Mecca and Medina in Saudi Arabia.
Bali bombings, October 12, 2002: Motivated by US war on terror and Australia’s role in liberating East Timor.
Madrid train bombings, March 11, 2004: Motivated by Spain’s participation in the invasion and occupation of Iraq.
London bombings, July 7, 2005: Motivated by British support of US in Iraq and war on terror against Muslims’
Others motivated by the US fighting Muslims:

Richard Reid (shoe bomber), December 22, 2001

Farouk Abdul Mutallab (underwire bomber), December 25, 2009

Nadal Hassan (Ft. Hood murderer), November 5, 2009

Faisal Shazad (Times Square bomber), May 3, 2010

Faisal Shazad told authorities, “I am part of the answer to the U. S. terrorizing the Muslim nations and the Muslim people.”

Without that motivation, the risks of terrorist attacks are significantly reduced. (See “What Terrorists Want” by Louise Richardson.) Remaining in Afghanistan increases the risk of a terrorist attack against the US, both from foreign terrorists and from domestic terrorists.

In the future, Drones (unmanned aerial vehicles or UAVs) may become the weapon of choice for terrorists. Two-thirds of the military drones are manufactured outside the US. Drones are relatively easy to make and can easily enter Mexico. They need only clear a 20-foot fence to attack the US.

Mathematical Challenges

The NATO forces have a significant mathematical advantage over the Taliban. The US has 100,000 troops in Afghanistan plus a similar number of contractors. NATO countries have 30,000 there. There are 90,000 to 120,000 trained troops in the Afghan National Army. Combined, this totals a minimum of 220,000 troops, mostly well trained and well equipped. The Taliban have 25,000 to 30,000 fighters, who are less well trained, less well equipped and often illiterate. Despite and seven to one troop advantage, NATO has not prevailed.

From a financial perspective, the security objectives in Afghanistan are virtually a mathematical impossibility. Afghanistan has a GDP of $24 billion. Afghanistan, which has only a 30% literacy rate, has a weak, corrupt central government that cannot assume responsibility for security in the foreseeable future. The US is unable to provide security with a budget of $100 billion and a seven to one advantage over the Taliban in military troops. Ultimately, to maintain security at a fraction of the $24 billion GDP, the Afghans will have to find a different solution. This could take generations to achieve.

Afghanistan will change when Afghans want change badly enough to change, not because Americans want them to change.

Conclusion

The rationale for the US remaining in Afghanistan may seem compelling, at least, politically. The US has considerable sunk costs in lives and resources in the Afghan conflict. Withdrawal could damage America’s global image. The Taliban would claim to have driven out the Americans, just like they drove out the Soviets. The Administration would be accused of cowardice.

Because the assumptions were wrong and the objectives unachievable, the American public will eventually turn against the US involvement in Afghanistan. At that time, politicians will support withdrawal to get elected. But, there are alternatives to withdrawal and they are available now.

In his Washington Post column August 31, 2009 titled “Time to Get Out of Afghanistan,” conservative Republican George Will stated, “forces should be substantially reduced to serve a comprehensively revised policy: America should do only what can be done from offshore, using intelligence, drones, cruise missiles, airstrikes and small, potent Special Forces units, concentrating on the porous 1,500-mile border with Pakistan, a nation that actually matters.”

Jack Devine, former CIA deputy director and chief of the CIA Afghan Task Force, made a similar case in the July 29, 2010 Wall Street Journal.

The need to revise our military strategy in Afghanistan should be clear. The Afghan conflict costs American lives and money, and it motivates lunatics and extremists to commit terrorist acts against Americans.

The death of Osama bin Laden provides the US with an opportunity to change strategies and tactics and fight terrorists in South Asia the same way we fight terrorists in other parts of the world – with intelligence, Special Forces and drones. This will mean a reduction in the US military presence in Afghanistan, which should help reduce the risk of terrorist attacks against the United States.

Author: dle2012