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October 15, 2007

How George Bush Changed
My Life


David R. Henderson

A friend and colleague of mine at the Hoover Institution, Peter Robinson, wrote a book a few years ago titled How Ronald Reagan Changed My Life. In this excellent book, Peter tells of how his time as a speechwriter for Reagan changed his life in a good way. Peter, by the way, was the author of the famous line, "Mr. Gorbachev, tear down this wall." It was one of the best lines in Reagan's whole political career: Reagan used his moral and powerful righteousness to appeal to Gorbachev's better nature rather than making threats. And, oh, by the way, it worked. Even though many people, including me, wondered why Reagan bothered, the fact is that although Gorbachev didn't literally tear down the wall, he didn't intervene with force when the East German government allowed it to be torn down. Instead, peaceful, freedom-loving East and West German citizens took care of the wall's demise.

Just as Ronald Reagan changed Peter Robinson's life, George W. Bush changed mine – only not in the same way. Reagan changed Peter's life by demonstrating positive character traits that Peter emulated. George W. Bush changed my life by making war on people in other countries. Whereas I had a good deal of admiration for Ronald Reagan, who had been my big boss when I was at the President's Council of Economic Advisers, there is nothing about George Bush that I would like to emulate.

Nevertheless, George W. Bush did change my life. Before Bush became a wartime president, my professional work, in both academic and popular articles, was almost entirely in domestic economic policy. I had written academic articles about taxation and supply-side economics, tariffs on oil, the International Energy Agency's oil-sharing agreement, and military manpower. I had written popular articles on free trade, taxation, health care, government subsidies, government regulation, immigration, and the drug war. In all of these articles, I made the case for less taxation, less spending, and less regulation of people's lives. But before September 2001, the number of articles I had written on war and foreign policy could be counted on the fingers of one hand. Not that I hadn't thought about it, and not that I wasn't antiwar. It's just that my specialty was domestic economic policy. Only when the first President Bush planned a war on Iraq did I write a piece about the war, and that piece made the narrow case that one could not justify the first Iraq war on the basis of Saddam Hussein's threat to the world oil supply. My piece, published in the Wall Street Journal, made quite a splash, leading Washington Post editorial writer Richard Harwood to write an editorial, "War – or Folly – in the Gulf," pushing my argument and leading CNN to have me on live for an interview on Labor Day, 1990. But then I returned to my domestic knitting.

Until 9/11. Like almost everyone else in America and, indeed, most people in the world, I was outraged by the 19 criminals who murdered 3,000 innocent victims. But when George Bush said, on that very same day, "Freedom itself was attacked this morning by a faceless coward … and freedom will be defended," I smelled a rat. In saying that freedom was attacked, Bush was saying something about the motives of the attackers, even though he couldn't have known that soon what their motives were. So it seemed to me that Bush was trying to set the groundwork for a war rather than trying to go after the higher-ups behind the perpetrators. I turned out to be right. In response to 9/11, George Bush made war on Afghanistan and, depending on which audience he and Dick Cheney were speaking to, a response to 9/11 was part of their motive in attacking Iraq.

That's when I started to inform myself regularly on foreign policy. My first piece on war after 9/11 was on a topic I was quite familiar with without knowing much about foreign policy: the economics of war. I had thought it was obvious that war hurt the economy, but on Sept. 14, 2001, New York Times columnist and economist Paul Krugman committed what economists call "the broken window fallacy." He wrote, "Ghastly as it may seem to say this, the terror attack – like the original day of infamy, which brought an end to the Great Depression – could even do some economic good." His argument was that the destruction of buildings in New York would lead to the construction of more buildings to replace them. Krugman, apparently, was not aware that over 150 years earlier, French economic journalist Frederic Bastiat had shown the problem with that reasoning. When a window is broken, noted Bastiat, it's true that there is a need to replace the window. That's what is seen. What is not seen but should be foreseen, wrote Bastiat, is that the resources used to make that window could have been used to produce something else, something that now won't be produced. The bottom line, concluded Bastiat, is that destruction is not profitable for society.

I had to reply. So on Nov. 28, 2001, I pointed out his mistake, among other things, in "The Economics of War," published in the San Francisco Chronicle.

I decided that I wanted to speak out, in print and orally, on these subjects. But to do so, I would need to inform myself the same way I did when I wrote on domestic policy issues: read articles by the people who disagreed with me, take careful note of their arguments and evidence, and ask questions, by e-mail or phone, of experts in the field. Bit by bit, I have become a foreign policy analyst. One of my first chances to speak on this was in June 2002, when, in a talk to admirals taking a special class at the Naval Postgraduate School, I made the case against war on Iraq. I argued that although I did not know whether Saddam Hussein had weapons of mass destruction, if he did, we could deter him from using them. Moreover, I said, the worst thing the U.S. government could do was attack him because then he might use them. There was amazingly little pushback. Virtually all of those who expressed any thoughts on the issue agreed with me. So I felt confident enough to write an article, "A Case for Not Invading Iraq ."

In October 2002, Congress rolled over for Bush on Iraq, voting 296-133 in the House of Representatives and 77-23 in the Senate to let Bush make war on Iraq. Then I was sure we were in deep trouble. So I started paying even closer attention to war and foreign policy.

I realized that although I had been teaching military officers at the Naval Postgraduate School for almost 20 years, I had thought amazingly little about how to apply the same economic tools to analyzing war and foreign policy that economists have successfully applied to domestic economic policy. When I started reading the academic literature on the economics of war and foreign policy, I found amazingly little written about such obvious questions as the incentives of politicians to make war and the unintended consequences of war, to name two. I found that the same pillars of economic wisdom that helped my students and me understand domestic economic policy could help us understand foreign policy. It's just that few economists had studied foreign policy using those tools. So there was a lot of low-hanging fruit. I wrote an academic article on that issue, titled, "The Economics of War and Foreign Policy: What's Missing?" In it, one of the conclusions I derived is that a government will do more destruction to people in a foreign country than to its own people because its own people have little information about what the government does to other people and because those foreigners don't vote in the home country's election. We should expect, therefore, that foreign policy will be more destructive than domestic policy. And, sure enough, it is. We don't see the U.S. government bombing certain high-crime areas of Los Angeles, for example, even though the arguments the U.S. government makes for bombing neighborhoods in Iraq could just as easily be applied to Los Angeles. This is obvious when you think about it, but I had never found it written anywhere.

Then, two years ago, after hearing me speak on foreign policy, Eric Garris, managing editor of Antiwar.com, asked me to write a regular column for this site. With some trepidation – would I have enough to say and would I be able to back up my claims, while still keeping and being productive in my day job? – I accepted.

None of this would have happened had George Bush not turned into such a war-making president. I don't thank him for this, and neither should you. I would much rather continue to write about health or energy policy. But the stakes are bigger in foreign policy, and very few of my economist colleagues are writing about war. Someone needs to do it. My biggest disappointment about many of my fellow economists is their unwillingness to write about such momentous issues. But that's another story.

There's another way George W. Bush has changed my life. By focusing on war, he has let the U.S. bureaucracy get out of control. The Food and Drug Administration is way more restrictive than it was when he took office – and one of the reasons is that Bush and his staff have paid so little attention. That means that drugs that would have been introduced and that would have saved lives will never see the light of day or will appear years later than otherwise. That could well affect my life – and yours. And forget about extending George Bush's tax cuts, one of his few domestic policy accomplishments, when they expire in a few years. The war has been so expensive that the odds of the tax cuts being renewed are minimal. George W. Bush certainly has changed my life. And I haven't even mentioned all the lives he has ended.

Copyright © 2007 by David R. Henderson. Requests for permission to reprint should be directed to the author or Antiwar.com.

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David R. Henderson is a research fellow with the Hoover Institution and an associate professor of economics in the Graduate School of Business and Public Policy at the Naval Postgraduate School. He is author of The Joy of Freedom: An Economist’s Odyssey and co-author, with Charles L. Hooper, of Making Great Decisions in Business and Life (Chicago Park Press.) His latest book is The Concise Encyclopedia of Economics (Liberty Fund, 2008.)

He has appeared on The O’Reilly Factor, the Jim Lehrer Newshour, CNN, and C-SPAN. He has had over 100 articles published in Fortune, the Wall Street Journal, Red Herring, Barron’s, National Review, Reason, the Los Angeles Times, USA Today, and the Christian Science Monitor. He has also testified before the House Ways and Means Committee, the Senate Armed Services Committee, and the Senate Committee on Labor and Human Resources. Visit his Web site.

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