David R. Henderson  

Krugman and Netanyahu

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On Fringe Benefits I Blew the ... A Gap in Public Choice?...

Reading Paul Krugman's latest post on Greece motivated me to go back and reread an earlier post by Tyler Cowen at Marginal Revolution. And that got me thinking about Bibi Netanyahu's recent speech to Congress and an analytic piece by Steve Chapman on that speech. The bottom line: Krugman's thinking on Greece is a lot like Netanyahu's thinking on Iran.

First, Greece. In "Things To Do When You're Dead To Davos," and in other recent posts, Krugman tends to take the newly elected Greek government's side in its dispute with the EU.

Parenthetical note: Is there any blogger out there who comes up with better titles than Krugman? If so, I havent seen him or her.

Tyler Cowen has laid out the problem with the Greek government's strategy:

The Greek government also riled up its citizens and now doesn't know how to deliver anything satisfactory to them, to the detriment of political stability. The latest irresponsible plan is to threaten a referendum on a new government, a new economic plan, or in one case even a referendum on euro membership was mentioned. Message discipline is scarcely to be seen.

All of that is simply painting the Greek government into a corner all the more, since a referendum will simply heighten the demands for mutually inconsistent outcomes. Signs of broader eurozone recovery, and the relative success of QE in talking down the value of the euro, have almost completely removed the bargaining power of Syrizas, or so it seems as of early March.

As I've said before, these people ruling Greece are The Not Very Serious People, and they are increasingly acquiring a reputation as such within the rest of the EU and eurozone.


In other words, Greece's government is simply not being realistic.

How does this compare to Netanyahu's recent speech to the U.S. Congress. Here, I don't need to quote his speech. You can find it for yourself. While in some ways, it was a great speech, in the important ways--actually laying out a plausible alternative--it wasn't. President Obama nailed when he said that Bibi said "nothing new."

Cue Steve Chapman in "Netanyahu's Impossible Dream":

Benjamin Netanyahu came to the U.S. Capitol Tuesday and offered an idea so simple and brilliant that everyone in the White House must have felt dumb for not thinking of it. His alternative to the imperfect deal the U.S. may strike with Iran? A perfect deal.

And further Chapman:
He [Netanyahu] claims the world can force capitulation with sanctions: "Iran's nuclear program can be rolled back well beyond the current proposal by insisting on a better deal and keeping up the pressure on a very vulnerable regime, especially given the recent collapse in the price of oil."

As if. The regime has weathered far worse conditions than these. It survived the 1980s in spite of a collapse in the price of oil, U.S. economic sanctions, and a devastating eight-year war with Iraq.




COMMENTS (33 to date)
Harold Cockerill writes:

Does anyone believe the Iranians won't use the bomb on Israel?

E. Harding writes:

I don't. I also don't believe the Israelis will use the bomb on Iran.

David R. Henderson writes:

@Harold Cockerill,
What E. Harding said.
Beyond that, if the Iranian government were to produce a bomb(s), which I still think is unlikely, it would be committing suicide to use it or them. Iran would have probably 3 to 5 bombs. Israel has about 100. Moreover, with its 3 nuclear-armed subs, has crucial second-strike capability. The Iranian government knows all this.

Andrew_FL writes:

"Where's your alternative" is not an argument I like in general, much less in this case in particular.

I think, however, the unpleasant reality no one wants to acknowledge is that there can be no peace with the Iranian regime.

What was the the old Churchill quote? Ah right. "Britain and France had to choose between war and dishonour. They chose dishonour. They will have war."

Andrew_FL writes:

@David R. Henderson-You say that like a government has never done something that stupid before.

David R. Henderson writes:

@Andrew_FL,
You say that like a government has never done something that stupid before.
I strongly believe that governments do very stupid things. But it is true that no government with a nuclear weapon has ever used nuclear weapons to attack another government that had nuclear weapons. We can never say never, of course, but the sample size (years times countries with nuclear weapons) is getting pretty big.

Harold Cockerill writes:

Logically it makes no sense for a government to start a nuclear war with another nuclear power but Muslim fanatics are committing suicide every day. They blow themselves to smithereens killing a few children in a market place. What's the payoff in paradise for killing a million Jews? There's an immense bet being made that the Iranians aren't serious about wiping out Israel. For Americans being on the wrong side of the bet ain't that big a deal. For the Israelis it's a different matter.

Jim Buckalew writes:

It's very hard to take this claim about sample size seriously. Mostly because 90 percent of what you are including in the sample size isn't qualitatively different from the situation facing a nuclear Iran setting off a nuclear arms race in the Middle East.

Huge nuclear powers vying off in a nuclear exchange that would destroy the entire Earth is a lot different than two small time nuclear powers potentially deciding to risk it. Even a hundred nuclear warheads, without boomer sub based warheads, doesn't leave much room for a 2nd strike capability. MAD was only operative because both the USSR and USA had so many warheads that the amount of warheads it would take to destroy the other sides warheads was in itself enough to destroy basically the whole world. The sample size for small regional powers successfully avoiding nuclear warfare is about 20 twenty years involving two countries that border each other making questions of nuclear fall out even more fraught with risk.

Dan Hill writes:

The challenge for all those so convinced that Iran would use the bomb is to explain why North Korea has not done so. Seriously, the people in charge in Pyongyang are total kooks. The Ayotollahs may be evil, but they're far more rational and calculating than the Kim family.

@Andrew_FL
...there can be no peace with the Iranian regime.

Please explain what it is that is so unique about Iran that makes peace an impossibility (other than the US neocons determination that we have war instead). We've had peace with the Soviet Union, an equally distasteful regime that actually posed an existential threat to the US. Note peace doesn't necessarily mean we're buddies, or that we don't work strenuously to contain the regime.

Aidan writes:

I find Cowen's claim that the current Greek government has "riled up its citizens" a little hard to buy. The Greek population was plenty riled up before the most recent legislative elections. SYRIZA's ascent seems more like a symptom than a cause.

Andrew_FL writes:

@Dan Hill-Because in order to have peace, both sides have to want peace. If you think Iran wants peace, you're sadly mistaken.

JLV writes:

@Andrew_FL
Maybe, but I don't see 61 votes in the Knesset for a peace treaty with Iran even if Khamanei is deposed by liberal Tehran hipsters.

Mm writes:

No Korea faces a stronger South Korea WITH an ironclad guarantee of US support- the trip wire of US ground troops in place(plus the Norks have no ability to attack the U.S. & therefore easily deter the US from escalating). We aren't seen as especially reliable in the middle east since we have/are bugging out of 2 wars w/o victory & are abandoning our local allies to the tender mercies of fanatics. The Obama administration is very unlikely to agree to base US troops in the Middle East as a tripwire. No regional state of any strength in the Middle East will want to be w/o an nuclear capability to deter Iran- that means multiple unstable nations with nucs- we have no prior experience with this- therefore pointing out we haven't had a nuclear catastrophe before is little reassurance. Not to mention millennial delusions etc that exist among some of the actors.

Yancey Ward writes:

Everybody is living in la la land in the Greek situation, not just the new Greek government.

Mark V Anderson writes:

I am a bit shocked that reasonable people believe that Iran is likely to use nukes on Israel. I do not understand this at all. This would of course result in the dismantling of the Iranian regime, and probably execution of their top leaders. Yes there are suicide bombers out there, but do you seriously believe the leaders of Iran would thus volunteer?

I think that the nukes that Pakistan already has are several times as dangerous as the ones that Iran might get. Pakistan is an unstable regime and who knows who will take power tomorrow, and some of those possibilities truly are fanatical. Iran, on the other hand, seems to act pretty reasonably to my eye. The USSR was also much more dangerous, but we got past that trap.

Vivian Darkbloom writes:

"We can never say never, of course, but the sample size (years times countries with nuclear weapons) is getting pretty big."

When one speaks of the "Iranian government" or the "Iraqi government" or the "Syrian government", or whatever, is one limiting oneself to the current government or to possible future governments? If the former, why would one do that?

I would have thought, until recently, that the chances that major factions controlling major portions of several countries and threatening to take take them over completely would a) behead innocent persons and post videos of those acts; b) set on fire a captured enemy pilot and burn him to death (and post a video of it); c) take sledge hammers and jackhammers and annihilate priceless and irreplaceable cultural objects (and post videos of that sort of fun); or d) hijack passenger planes and fly them into two skyscrapers, the Pentagon and the ground; or e) assassinate several persons for publishing a cartoon about Allah (or being associated with someone who did) would all be quite small "due to the relatively large sample size" that theretofore had existed.. In this respect, given the recent mindset of the folks committing those acts, it might be more appropriate for the "sample size" to include all barbaric acts committed in, say, the past 2000 years or at least since the Middle Ages. Why should the sample size be restricted to barbarism and disregard for human life that only extends since the invention of the nuclear weapon? Regarding "samples", I would suggest that how you determine the nature and content of that sample is as relevant or more relevant than the statistics flowing from the one you narrowly choose. It's kind of like those polling questions---which question you ask and how it is framed is often more relevant than the results. I think you'd better pay more attention to the nature of the sample you are testing.

All the above-mentioned recent events happened for much the same reason that those same folks might take a nuclear weapon (if they had one) and fire it towards Israel (or elsewhere) and likely make a video of it.

This one doesn't make sense to me. I don't think you want to get this wrong.

Vivian Darkbloom writes:

Before some wise guy says in response to paragraph 2 in the prior comment, that you cannot take a sample of the future, I'm just pointing out the (severe) limitations of samples and this type of thinking that relies on them predict the future. Over-reliance on "samples" strikes me as risky stuff when dealing with nuclear issues.

For example, suppose David had been asked in 1960 "What do you think the chances are that a government will put a man on the moon". David might reply, "well, given the very large sample size (no government in history has ever done it), one can never say never, but not that high". This completely ignores, of course, other developments relevant to future probability.

David R. Henderson writes:

@Vivian Darkbloom,
I'm just pointing out the (severe) limitations of samples and this type of thinking that relies on them [to] predict the future. Over-reliance on "samples" strikes me as risky stuff when dealing with nuclear issues.
I agree. And note that I didn’t rely on samples. I did the best I could with the data I have.
Many bad things that have happened that I would not have predicted when I moved to “the land of the free” in 1972. One is that Americans would meekly go along with being felt up in airports or, as an alternative, having pictures taken of them naked. I wouldn’t have predicted that Americans would meekly have accepted snooping by the NSA. I wouldn’t have predicted that a U.S. president would have a kill list that includes the names of Americans he plans to kill without a trial, and that 60% of Americans would, having found out, immediately call for him to be impeached.
I’m not sure what you do with uncertainty. What’s your alternative way of thinking, Vivian?

Yaakov writes:

What good is a deal with Iran? What does the US gain from such a deal? Why not just let the Iranians slowly dwindle and collapse or opt out of the nuclear program which is devastating their country?

Such pressure actually works, as it did with Libya and Syria (chemical ammunition). Totalitarian regimes are very vulnerable and as we know from history, tend to collapse or radically open to the world.

Yaakov writes:

@JLV writes:
Maybe, but I don't see 61 votes in the Knesset for a peace treaty with Iran even if Khamanei is deposed by liberal Tehran hipsters.

We can be absolutely sure that their would be an overwhelmingly large majority in the Knesset for peace with Iran, since until 1979 there actually was de facto peace between Israel and Iran. In addition, Israel's Knesset voted with overwhelming majorities for peace agreements with Egypt and Jordan.

Vivian Darkbloom writes:

David,

You seem to be suggesting by your list of developments against civil liberties in the US that I agree with limiting them (snooping, spying, frisking, etc). I don't think that insinuation follows from what I wrote. In fact, I am very much concerned about those adverse developments, perhaps more than you are. Your extrapolation is very unwarranted and does not logically follow the original topic.

Rather, the issue is the one raised in the main post and in comments---is it wise to enter into a nuclear deal with Iran that enables them to develop (and potentially use) nuclear weapons and what kind of risks are entailed with that? Or, absent a nuclear deal, allowing them to do so? The fact that I may agree with you that US civil liberties are being unduly infringed on isn't inconsistent with concern over letting Iran have a bomb in the context of those negotiations, much less my concern over what I believe is a very faulty manner of assessing risk. What is my alternative way of thinking? I'm saying that in assessing risk, it is very necessary to consider a) the magnitude of damage entailed with getting the probability of an "event" wrong, rather than just the probability of the event, as well as b) recent developments that might affect that probability--see my moon shot example and the real possibility that these extremists might succeed in taking over Iran or getting access to their weaponry. Other than static things such as flipping coins (provided they have the same balance), facts change that affect probability beyond just the historical precedents. In this particular case, those other facts probably are more important than your backward-looking sample analysis.

I recall a recent blogpost by Mr, Caplan in which I also expressed surprise at how he went about assessing risk on a strictly backward-looking sample analysis, similar to what you've done here. I'm much more comfortable with you guys doing harmless blogging than running national security (or even the risk management department of a major organization)! But, of course, it's just a blog, so based on my statistical sample, folks don't take these exchanges too seriously anyway, But, you never can say never... (-:

David R. Henderson writes:

@Vivian Darkbloom,
You seem to be suggesting by your list of developments against civil liberties in the US that I agree with limiting them (snooping, spying, frisking, etc). I don't think that insinuation follows from what I wrote.
I can now see why you thought that. I didn’t mean to imply that. My point, rather, was about how nasty even our own government can get (I’m assuming you’re also an American but I don’t know) and how little I trust it. I admit also that it was a bit of a vent.
But I agree with that that is a side issue with respect to the probability that the Iranian government will get a nuclear bomb and engage in an offensive use of it.
What is my alternative way of thinking? I'm saying that in assessing risk, it is very necessary to consider a) the magnitude of damage entailed with getting the probability of an "event" wrong, rather than just the probability of the event, as well as b) recent developments that might affect that probability--see my moon shot example and the real possibility that these extremists might succeed in taking over Iran or getting access to their weaponry.
I agree.
I also expressed surprise at how he went about assessing risk on a strictly backward-looking sample analysis, similar to what you've done here.
As I’ve said, I do not do it on a strictly backward-looking sample analysis. But I do let that analysis influence my estimate of probability. And I have had discussions with experts, including one former Israeli general (the discussion was off the record), that tell me that I am not crazy for thinking there’s not that great a threat.
I'm much more comfortable with you guys doing harmless blogging than running national security (or even the risk management department of a major organization)! But, of course, it's just a blog, so based on my statistical sample, folks don't take these exchanges too seriously anyway, But, you never can say never... (-:
It’s too bad that you descended to using put-downs in what was otherwise a civil discussion. But, to get to the merits of your claim, I think I would do much better than, say, Condi Rice did in assessing the threat from Saddam Hussein.

txslr writes:

"Benjamin Netanyahu came to the U.S. Capitol Tuesday and offered an idea so simple and brilliant that everyone in the White House must have felt dumb for not thinking of it. His alternative to the imperfect deal the U.S. may strike with Iran? A perfect deal."

This, of course, is dishonest. Netanyahu said no such thing. He said that having NO deal was better than having THIS deal, which is a very different thing.

One sign of demagoguery is the refusal to deal with one's opponent's real arguments.

And it is difficult not to credit Netanyahu's real argument (perhaps the reason Chapman refuses to address it.) As near as we can tell, the agreement the administration is working towards provides no apparent benefits for the U.S., constituting a complete capitulation to Iran. So, what is the logic of surrendering when you are not losing?

Vivian Darkboom writes:

Thanks for the explanation that the extrapolation and insinuation was not intended. I accept that.

As for the "put down", that was not intended either, but it may have had a little bit to do with what I thought was some sarcasm from your direction, in what was until then "a very civil discussion", so sorry for that. It was also a friendly reminder that maybe we shouldn't take ourselves too seriously here (and elsewhere in the blogosphere).

Not sure what Condi Rice has to do with anything. I guess we'll never know what Saddam might have done. *That* risk, whatever it may have been, was eliminated.

txslr writes:

I think that a lot of the argument over whether Iran would use nuclear weapons has to do with the participants operating under different sets of stipulations. The “Iran is rational and would not use the bomb on Israel” are implicitly saying that, under current conditions Iran would not drop a bomb on Israel shortly after they got one. The opposition (I think) holds that, under an imaginable set of circumstance in the future Iran would use nuclear weapons on Israel (and/or someone else). I think that it is pretty difficult to disagree with either position, but only the latter is ultimately relevant to the discussion, because if Iran achieves nuclear capability it is unlikely to disappear after the first instant.

Approached from a different angle, if nuclear weapons are of no use to the Iranian regime (a sworn enemy of the U.S. and the West in general) why have they been willing to risk impoverishment and instability to get them? And no fair claiming that they are not rational.

David R. Henderson writes:

@Vivian Darkbloom.
As for the "put down", that was not intended either, but it may have had a little bit to do with what I thought was some sarcasm from your direction, in what was until then "a very civil discussion", so sorry for that.
Thank you. And I can see how my “vent” caused you to think that. No harm.
It was also a friendly reminder that maybe we shouldn't take ourselves too seriously here (and elsewhere in the blogosphere).
I totally missed that. I thought it was directed at Brian and me.
Not sure what Condi Rice has to do with anything.
She has a lot to do with it. She was one of the people most involved with national security. If you’re saying that I wouldn’t do a good job at national security, a reasonable comparison is with the kind of person who got that job--a Russian expert who knew virtually nothing about the Middle East and whose own mentor thought she messed up big time--not the person you would ideally like.

Tom West writes:

I don't think you want to get this wrong.

Unfortunately, the only way to *guarantee* one's safety is to take actions that would make the greatest horrors of the 20th century look like playground antics.

So, stepping back from that silliness, given that there's almost nothing that can prevent Iran from gaining nuclear weapons in the next few years short of utter destruction of their infrastructure (which kills a few million via starvation), just what are people who oppose this deal proposing?

Full scale invasion? Way too expensive. Air strikes? Invites retaliation on Saudi Arabia wrecking the world economy. Nuclear first strike? Works, but see first paragraph. Sanctions? Hasn't worked in past (see North Korea), and no signs of working in future.

Since we're not going to become monsters, I simply don't see any way of avoiding having to live with a nuclear Iran, whether we like it or not. As pointed out above, we're stuck living with a nuclear North Korea.

Did hard times in the 1980s prevent Iran from getting the Bomb then?

Tom Sparks writes:

[Comment removed for name-calling.--Econlib Ed.]

Yancey Ward writes:

I think Tom West has it just about right.

MikeDC writes:

I agree that if Iran is hellbent to get the bomb they can eventually get it, but it's also reasonable to image a lot of means to oppose them short of full scale warfare.

The truth as I se it is that U.S. libertarians have a very simplistic view of foreign policy. Unfortunately the U.S. govt has lost a lot of its own sophistication (such as it had at least) too. Our analysis of threats is facile and overconfident and likewise our conceived actions seem super mole, exasperated and impatient. The fact that we can't ultimately stop Iran if they insist doesn't mean we shouldn't attempt to delay them as much as possible and try to change the dynamic in our favor.

If you're losing a chess match, you should still delay as much as possible preserve your force and hope the other guy makes a mistake.

With Iran, it's not just the fact that they could use the bomb that's the problem. Them having it strengthens them and their ability to wage war on their neighbors. It leads to more nuclear proliferation. It's definitely a bad we should try to delay and thinking otherwise seems utterly illogical.

ColoComment writes:

I've been reading "The Last Warrior," by Krepinevich and Watts, about Andrew Marshall, the man who ran the Office of Net Assessments at the Pentagon for some 40 years, and until just recently. The authors conclude that it was partially due to his office's net assessments of the lack of strength of the Soviet economy and the extraordinarily high percent of GDP commitment to military matters, and our decisions taken in reliance on that information, that brought down the Soviet Union.

One part of Marshall's theory of net assessment is to attempt greater understanding of an opponent's organizational behavior, particularly of the enduring organizational and resource constraints on its decision-making.

To evaluate what Iran will / would do, either to obtain nuclear weapons or to use them, based on how and why WE would do so, or how or why North Korea would do so (or not do so), will likely lead to erroneous conclusions.

One must strive to understand what influences, motives, incentives move IRANIAN decision-makers, and what restraints THEY operate under, not simply assume that they will do what we would do under similar circumstances.

One thought: what if Iran merely made a credible threat to detonate a nuke over Tel Aviv (or wherever) if such 'n such did not happen? Could we or Israel chance that Iran was bluffing?

Mr. Econotarian writes:

Harold Cockerill writes "Muslim fanatics are committing suicide every day."

However you will note that Ali Khamenei does not get into a car and go blow himself up, he is generally paying other people to do so...

For that matter, Netanyahu and his family don't live in a West Bank settlement either...

There are a lot of religious nuts in the Middle East, but with the possible exception of ISIS, I don't think the leaders are as strong believers as their soldiers.

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