The COVID-19 inflation episode: Lessons from emerging markets


The COVID-19 inflation episode: Lessons from emerging markets



Lighten Up on Rumsfeld

Secretary of Defense Donald Rumsfeld has come under sharp criticism in Congress, the Pentagon, and the media for taking an insular and imperious approach to his broad review of American defense policy. Such critiques are off the mark.

It is true that Rumsfeld will eventually need to create a broad coalition on Capitol Hill and within the uniformed military to implement change in the U.S. armed forces. Perhaps he will fail at this task. But he can’t start marshaling support for a new military policy until he has developed that policy. It is hardly unreasonable that he should need a few months in office to do so.

Rumsfeld has not shut himself off from debate during his four months as secretary of Defense. He has created more than a dozen advisory panels on various matters of security policy and has had hundreds of meetings with military officers, members of Congress, and outside experts. So far, the main criticism of Rumsfeld seems to be that he is doing too much listening and not enough leaking.

Former Defense Secretary William Cohen has criticized Rumsfeld for not building a coalition in support of his policies. But Cohen, while an honorable and competent Defense secretary himself, was widely criticized for a 1997 review in which bureaucratic process seemed to matter more than substance. The policy that Cohen ultimately produced had some bright spots—for example, it increased financing for defenses against sea mines, ballistic missiles, and chemical and biological agents. But he canceled no major weapon system, gave little attention to smoldering problems in the Taiwan Strait, left each military service with the same share of the Pentagon budget as before and scheduled cuts in funding for basic research and development. In other words, he may have forfeited an opportunity to think broadly and strategically by his rush to build coalitions and his desire to placate key players. At least Rumsfeld seems to be avoiding those mistakes.

As another example of the dangers of premature inclusiveness, recall what happened as Les Aspin developed the Clinton administration’s first major defense plan in 1993. Collegial and open by nature, Secretary Aspin floated a number of ideas before he was ready to defend them. One worthy concept would have placed less emphasis on being ready to fight two Desert Storm-like wars at a time and instead would have prepared for one all-out war. This idea was known as “win-hold-win,” since in a worst case, the United States would only be able to conduct a defensive-holding operation in a second theater until it had finished off the first opponent elsewhere.

Much of the U.S. defense community would now prefer such a strategy, since it would free up more funds to buy weaponry and conduct research and development. But Aspin’s win-hold-wind proposal was wrongly derided as a prescription for “win-hold-oops” that might lead to defeat in a second war. Pentagon insiders who did not like the idea pilloried it to the press and Congress. The plan was dropped, to the nation’s likely detriment.

Shortly thereafter, the Clinton administration’s review of U.S. nuclear posture, dominated largely by the uniformed military, would up incrementalist and excessively cautious. Largely as a result, the country still has almost as many strategic nuclear weapons as it did eight years ago, and they are still on hair-trigger alert.

Rumsfeld’s defense policy review may or may not turn out to be sound. There are reasons to worry that he will cut ground forces too much; end U.S. support for peacekeeping missions; devote too many dollars to missile defense and space weaponry, and make the idea of military competition with China a self-fulfilling prophecy.

But the new secretary of Defense is taking some time to figure out where he thinks the country’s military should go before he worries about how to take it there, and this is a good sign.