Jan 14

(To read the rest of "On Violence’s Most Thought Provoking Foreign Affairs Event of 2015: Iraq Redux", please click here.

And click here to read the entire “The (Opportunity) Costs of Security” series.)

Last week, I asked, “Did we consider the opportunity costs of the first Iraq War?” The answer was, “No.”

But I limited myself to only considering the opportunity costs of spending our “war capital”, the vague combination of American morale/enthusiasm for war. When we go to war we also spend real financial capital. War costs money. And that money has opportunity costs of its own.

The worst part of over-hyping of the ISIS threat is that it will lead America into another war without questioning the costs or considering these opportunity costs. According to some estimates, a new Iraq war could cost billions (with a B). (It’s already cost at least a billion dollars.)

How did it get so high? Well, every aircraft carrier costs millions to operate in a war posture. Every deployed soldier costs tens of thousands of dollars. Every contractor costs hundreds of thousands of dollars. Every cruise missile costs tens of thousands of dollars. Every plane in the sky requires extra maintenance. This totals out to nearly $300,000 for every hour were at war with ISIS.

And America might spend billions more to defeat ISIS. As I referenced last week, fiscally conservative Republicans suddenly become drunken soldiers at the strip club when it comes to fighting wars. So we need to have a conversation about opportunity costs. Here are my biggest candidates for how America could have spent a billion dollars instead of fighting ISIS.

Finally, a caveat: I only wanted to think about foreign policy spending, because frankly, we’d be here all day if we wrote about ways military spending could be converted into domestic spending. (Vaccinations, infrastructure, and so on.)

Paying Down the Debt

Somehow, when it comes to federal spending, wars and military spending don’t seem to count. Famously, the first war in Iraq was the first time America went to war and lowered taxes instead of raising them. As Eric C wrote in his comment on last Monday’s post, in 2008, whenever Republicans accused Democrats of raising the debt with proposed stimulus programs, all he could think about was constantly increasing defense spending, intelligence spending increases after 9/11, and the ginormous cost of the wars in Iraq and Afghanistan, without a dime raised in taxes to cover these costs.

An opportunity cost of the first Iraq war, in monetary terms, was not saving money for stimulus in case the economy crashed. Which happened five years after the first war started.

How much have the post 9/11 wars in Iraq, Afghanistan and other countries cost so far? At least $1.5 trillion, according to James Fallows. According to Linda J. Bilmes, the price tag could reach up to $4 to 6 trillion, factoring in associated military costs and veteran's benefits.

But we shouldn’t live in the past. Let’s look to the future. And the very simple calculation every politician should make is whether it is more important for America to pay down its debt (now and in the future) or to fight another war in the Middle East. Maybe the current billion dollar price tag won’t break the bank, but it would help.

Leading the World in the Sustainable Development Goals

Later this year, the U.N. will replace the Millenium Development Goals--that were moderately successful--with the Sustainable Development Goals. The U.S. could really cement its leadership of the world by vowing to spend 1.0% of its GDP on foreign aid and development. (The current global target is 0.7% of GDP.) The U.S. currently spends 0.19% of its GDP on foreign aid. (Despite the perception that the US spends 25 to 30% of the federal budget on foreign aid, it spends about 2%.) We could even do it with business friendly tactics like direct aid, small business loans, and venture capital support. But the U.S. would rather spend a billion dollars on war funding than getting people out of poverty.

Or Leading the World on Climate Change

If you’ve been reading/following any of the Economist’s year ahead coverage, you know that later this year the world’s leaders are meeting in Paris for a summit on climate change. While the U.S. and China have taken a step on the path to confronting climate change by agreeing to terms, the U.S. could do even more by helping developing countries confront climate change. Financially, developing countries face a tougher burden developing green energy; strategically, this is the best way to stop carbon pollution.

Again, this would require hundreds of millions if not billions of dollars, and it would require the Senate to ratify a treaty (more on that next week), but it is a real option. And it is possibly much more dangerous than ISIS.

Fighting Ebola

Finally, let’s close with a way we could have really helped people last year. What if I told you that Ebola could have been stopped before it became an epidemic. You would probably say, “Well, yeah, I read about that in the The New York Times, how poor communication led to an epidemic.”

And you’d be right.

Frankly, America has some of the best health care professionals in the world. If we had an extra billion dollars to spend on helping people abroad, I wish we’d spent much more, much sooner in Africa. Perhaps we could have tracked the spread of the disease more effectively, preventing the tragic lack of communication that led to the deaths of tens of thousands. We would have actually saved lives, built up good will, and come across as a nation interested in helping people.

Now that sounds like a smart way to spend money.

Jan 09

(To read the rest of "On Violence’s Most Thought Provoking Foreign Affairs Event of 2015: iraq Redux", please click here.)

When ISIS started taking territory in Iraq, America--with an assist from the media--became afraid of two things. The first was that ISIS would start launching Al Qaeda style attacks against the US, which Michael C debunked yesterday. The second was that…

ISIS IS ABOUT TO TAKE BAGHDAD!!!!!!!!!

Unfortunately, ISIS has been about to take Baghdad for over half a year now... 

- 12 June 2014, Al Arabiya, “ISIS Militants Plan to March on Baghdad

- 12 June 2014, The Daily Mail, “ISIS butchers leave 'roads lined with decapitated police and soldiers': Battle for Baghdad looms as thousands answer Iraqi government's call to arms and jihadists bear down on capital

- 15 June 2014, The Telegraph, “Iraq crisis: ISIS battles for Baghdad - June 15 as it happened

- 22 June 2014, Haaretz, “High anxiety in Iraqi capital as it awaits ISIS invasion

- 1 July 2014, Newsweek, “Expected to Take Aim at the 'Baghdad Belt’”

- 29 September 2014, The Daily Mail, “ISIS fighters now 'at the gates of Baghdad': Islamic militants fighting 'just one mile from Iraqi capital' despite days Western airstrikes

- 5 October 2014, The Washington Times, “Islamic State withstands bombing campaign, plots Baghdad invasion

- 11 October 2014, CBS, “ISIS encroaches on ultimate prize in Iraq

- 12 October 2014, Al Arabiya, “ISIS rallies ‘10,000 militants’ at gates of Baghdad

- 14 October 2014, Time, “180,000 People Flee Western Iraq as ISIS Inches Ever Closer to Baghdad

- 17 October 2014, The New York Times, “ISIS Keeps Up Pressure Near Baghdad as Iraqi Troops Hesitate

To be fair, ISIS “threatened” Baghdad mainly in June and October. But this collection is only a partial list. I only started collecting headlines like this after ISIS threatened Baghdad the second time, and I thought, “They haven’t taken Baghdad yet? They’ve been threatening them since June.” More important than that question is this one:

Can ISIS even take Baghdad?

Now, I’m no military expert--that’s Michael C’s area of expertise--but from my layman’s point of view, one thought stands out: Baghdad is majority Shia. True, finding accurate numbers on the actual demographic breakdown is not easy. But according to Newsweek and Joel Wing’s excellent Musings on Iraq--which cites the CIA fact book--Baghdad is 70 to 80% Shia. Secondly, the Shia majority has some very powerful militias ready at their disposal, as America learned the hard way.

In other words, ISIS won’t be waltzing into Baghdad anytime soon.

Jan 07

(To read the rest of "On Violence’s Most Thought Provoking Foreign Affairs Event of 2015: Iraq Redux", please click here.)

As the media responded to the death of American journalist James Foley at the end of last summer, the hype for a new war eventually caused 63% of Americans to support air strikes against ISIS. (Read Zach Beauchamp for great coverage on the over-reaction here.) The culmination, for me, was this article by Retired General James Allen [emphasis mine]:

“If all the actions of the Islamic State, or IS, to date weren’t sufficiently reprehensible, this act and the potential for other similar acts will snap American attention with laser-like focus onto the real danger IS poses to the existence of Iraq, the order of the region and to the homelands of Europe and America.

To make sure his readers understand the severity, he continues, “Make no mistake, the abomination of IS is a clear and present danger to the U.S.” Remarkably, General Allen provides almost no evidence to prove this point.

I’m not picking on just General Allen; no one in the Obama administration, including the President himself, or congressmen advocating for war, ever provided evidence that ISIS posed a threat to the US beyond “Trust us.” A perfect example is this USA Today article with the provocative headline, “Islamic State biggest threat since 9/11, sources say”. Again, beyond “sources”, it didn’t have any evidence.  

Since I can’t debunk every media article, I want to use General Allen’s op-ed as a case study in how to over-hype the threat of terrorists. So what evidence did Gen. Allen bring to bear? Here’s a list after reading and re-reading his op-ed:

- The Islamic State wants to establish a Caliphate in Iraq and Syria.

- There are foreign fighters in their ranks.

- They are a well-organized insurgent group.

- They have money and weapons.

- They beheaded one American journalist. (And since more.)

- Al Qaeda used Taliban support in Afghanistan.

- Finally, this vague sentence: “The leadership of the so-called Caliphate has been clear that it will focus on Western and American targets if given the chance...”

So all those factors point to a group that could and is threatening the current state of Iraq. At least they have a significant chance to carve out a chunk of territory for their own. The problem is many of those “facts” don’t lead to ISIS being a threat to America’s homeland, as General Allen claimed.

Take the first and last bullet points; they’re contradictory. If ISIS wants to establish a Caliphate, the worst thing it could do would be to provoke US, UK and European nations into re-invading Iraq. That would set back its plans years, decades or end them all together. (Ask the Taliban how it worked out for them.)

Further, US intelligence agencies really don’t know much about the group. In fact, the US Counter-Terrorism adviser contradicted the Secretary of Defense on whether ISIS posed a threat to the homeland. So its more accurate to say, “Some sources say ISIS isn’t a threat and other sources say they are.” The number of fighters under ISIS control vary wildly from one estimate to another. When the US intel community (and the media) don’t know much about a new terrorist group, they tend to overestimate their strength.

To top it off, this dire and immediate threat to the US finished the year by completely dropping out of the news almost altogether, except for articles about how ISIS ended the year stalled out.

(Oh, and using the evidence that because Al Qaeda was harbored by the Taliban that ISIS will surely harbor international terrorists isn’t evidence.)

Yes, ISIS committed a war crime when it executed a journalist in Iraq. Yes, ISIS is bad for the Middle East and civil wars are bad for the world. However, given that it is against their interests to attack the US, we don’t know how many troops they have in the first place, they don’t have a terrorist arm, it is probably reasonable to conclude they won’t attack the U.S. homeland.

If politicians really want to make the case for action against ISIS, they can, but they shouldn’t hype a terror threat on our homeland.

Jan 06

(To read the rest of "On Violence’s Most Thought Provoking Foreign Affairs Event of 2015: Iraq Redux", check out the articles below... 

- Future ISIS Terrorist Attacks and Beach Front Property in Arizona

- Waiting For ISIS or: The Islamic State is about to Take Baghdad!

- The (Opportunity) Costs of the First Iraq War

- The (Opportunity) Costs of ANOTHER War with Iraq

- Bad Media! or: The Media Failed on Iraq...Again

- Every Political Talk Show Needs a War Skeptic and Other Solutions for Our Pro-War Media

In one of our first posts, Eric C made a bold prediction. In “The Obama Blame Game Part 2”, he wrote that, “Since 2003 all terrorist roads lead through Iraq.” He predicted that, in the future, terrorists would be inspired by Iraq, trained in warfare in Iraq, and even funded/organized in Iraq. In short, invading Iraq would have more to do with promoting extremism than it did in stopping it.

Like other predictions we have made, Eric went from being wrong to right. Terrorism didn’t “go through Iraq”, as a succession of lone wolf, would-be jihadists--the failed Times Square bombing or the failed underwear bombing or the failed cargo plane attacks--had their origins in Pakistan, Somalia and Yemen, respectively. The Boston Marathon bombing had its origins with Muslim Chechens.

(Eric C clung to his point that, borne out by each of the above plots, the U.S. invasion of Iraq still inspired many, most or all of the would-be jihadists.)

Then came ISIS. When the Islamic State of Iraq/Syria/Levant beheaded Western journalists, it seemed to finally vindicate Eric C. And when they invaded Iraq, the Washington national security establishment jumped on board with Eric C’s thesis: ISIS (formerly the scary Al Qaeda in Iraq) is the new boogeyman of the moment. These national security types believe that if we don’t get involved in Iraq again, we will be attacked on our own homeland (though many were the same who advocated for invading Iraq the first time). 

In just the above four paragraphs, we’ve related Iraq to international terrorism, counter-insurgency, extremism, failed predictions, American politics, the failure of the Army, a “Getting Orwellian” topic, and we’ve only just started scratching the surface. Iraq, one of the reasons Michael C joined ROTC, one of the places he deployed (at the very end), one of the inspirations for this blog, is back in the news because its civil war (unsurprisingly) re-ignited. And that civil war involved the beheading of a US journalist that caused the country to believe ISIS was the most dangerous organization in the world. And that fear, in part, helped swing the balance of power in Washington in an election year.

So we have our “On V Most Thought Provoking Event of 2014”, though not without some controversy, which we debated yesterday.

Of course, the thoughts this war inspired are legion. Expect a good bit of debunking, controversial opinions, and unmentioned ideas.

In short, as a nation, still haven’t learned the lessons of the last decade.

Nov 24

Our nation doesn’t understand its heroes. Just ask Marcus Luttrell (from Lone Survivor):

“It’s been an insidious progression, the criticisms of the U.S. Armed Forces from politicians and from the liberal media, which knows nothing of combat, nothing of our training...”

“Knows nothing”? Maybe that was true when Luttrell co-wrote Lone Survivor, but as we wrote in “The Loudest "Quiet Professionals" Start Screaming: Hollywood Edition” and “The Political Navy SEAL” , the media can’t get enough of SEALs. These “quiet professionals” have become stars, especially in the “mainstream media” (though we hate that term).

60 Minutes has led the charge on glorifying SEALs. In the last few years, On V favorite Scott Pelley has done two stories about SEALs. In the first, he--like every other reporter on the planet--reported on the Osama bin Laden raid. However, he followed this story with another in-depth piece about this SEAL rescue. Lara Logan has gotten in on the action too. And 60 Minutes did a story on Luttrell. None were critical of SEALs at all.

Then there is the whole sub-genre of SEAL articles just about killing Osama bin Laden. Esquire featured the most notorious version with “The Shooter”, with some odd sections about why “the shooter” doesn’t have health care. (Another “shooter” also recently outed himself.) ABC News also featured another SEAL explaining why they shot Osama on sight. Vanity Fair’s Mark Bowden published an entire book on the subject, and compared his writing to Mark Owen’s book No Easy Day. Peter Bergen questioned “The Shooter”’s accuracy as well on CNN. Another “shooter” also recently outed himself, again no one can really prove if he did or didn’t do the job. He also gave a talk last year at a Republican fundraiser.

But what if you prefer reading and avoiding the mainstream media? How will you ever find books about the Navy SEALs? You won’t. The SEALs are just too damn secretive.

Unless, of course, the Navy grants access to a photographer. Take this contradictory passage from an article by NBC News. The article opens with the lines, “Since the U.S. Navy began its special Sea, Air, Land Teams, commonly known as the U.S. Navy SEALs, in 1962, little about them has been made public. That was on purpose.” Then a few paragraphs later...

“Mathieson has spent the last six years photographing and researching the SEALs. He recently published a definitive book on the SEALS with David Gatley titled, United States Naval Special Warfare/U.S. Navy SEALs. This is not an outsider’s peek inside the SEALs. Rather, Mathieson was given unique access to the inner workings of the secretive group because the Navy blessed his project.

Not so secretive, is it? It’s okay, the Washington Times used almost the exact same words to describe Mathieson’s book. (As if they read the same press release...) (H/T to Abu Muqawama.)

If you need more reading, USA Today gives you seven more options on books by SEALs recently released, including...

- Damn Few: Making the Modern SEAL Warrior by Rorke Denver

- SEAL Team Six: Memoirs of an Elite Navy SEAL Sniper by Howard E. Wasdin

- Inside SEAL Team Six: My Life and Missions With America’s Elite Warriors by Don Man

- Fearless: The Undaunted Courage and Ultimate Sacrifice of Navy SEAL Team SIX Operator Adam Brown by Eric Blehm

- Lone Survivor by Marcus Luttrell and Patrick Robinson

- The Red Circle: My Life in the Navy SEAL Sniper Corps and How I Trained America’s Deadliest Marksmen by Brandon Webb

And they didn’t even include A Captain’s Duty, American Sniper, SEAL Target Geronimo or Luttrell’s second book Service.

Our point isn’t that Navy SEALs aren’t quiet professionals. The vast, vast majority are; they go about their service without writing about it, even after they get out.

Some SEALs, though, are ruining that for the rest.

Jun 17

When I joined the Army, like most impressionable young cadets, I dreamed Special Operations dreams. The Army path to becoming a modern John Matrix (Arnold Schwarzenegger in Commando) roughly follows: 1. Branch Infantry. 2. Get my airborne wings. 3. Graduate from Ranger School. 4. Become an Army Ranger. 5. Join the Special Forces. 6. Go to Delta Force. 7. Go to the even more secretive Intelligence Support Activity.

Of course, as a nerd, I dreamed of doing intelligence work for Delta. (Or, as they’re called now, the Combat Applications Group (CAG).) The farthest I got was doing intelligence for 5th Special Forces Group. By the time I left the Army to pursue my MBA, the allure of CAG had worn off.

But it wasn’t just me who didn’t care about CAG/Delta; Americans don’t really carry either. America now loves its SEALs. Kick-started by SEAL Team 6’s assault on Osama bin Laden’s compound, the SEAL legend has morphed from puppy love into full-blown stalker obsession. The Navy SEAL’s emphasis on secrecy only fuels this passion. Oh, the Navy SEALs, America’s quiet professionals, they don’t brag, they keep to themselves, they don’t do interviews and they shun media coverage.

Except when they don’t.

Though they are “quiet professionals”, they make quite a bit of noise. (Find examples of SEALs or SEAL supporters boasting about their “quiet professionalism” here, here, here, here, here, here, here, here and here.) While the last movie about Delta Force came out in the 80s (Fine, The Unit was probably Delta Force), Navy SEALs have filled American airwaves with their stories, silently and quietly in the news constantly since 2010.

On cable television alone, we have seen...

- The Military Channel cover SEALs 24/7. In a post last year, Eric C looked at the schedule for The Military Channel. That night, their schedule included the TV programs “Weaponology: Sniper Rifles”, “Weaponology: Navy SEALs”, “Secrets of Navy SEALs” and “Secrets of SEAL Team 6”. Notice a trend?

- Not to be outdone, the National Geographic channel rushed out a movie on the Osama bin Laden raid last year.

- Oh, and the Discovery Channel also filled us in on the secrets of SEAL Team 6, which again, are not very secret any more.

SEALs are even more prominent on the big screen. Though Hollywood made Navy SEALs in 1990, they hadn’t made a movie featuring these quiet professionals...until the Osama bin Laden raid. (SEALs made guest spots in Tears of the Sun (which no one saw) and Transformers (which also had Rangers).) Now our “quiet professionals” have starred in Act of Valor and Zero Dark Thirty two years ago, Paul Greengrass’ Captain Phillips last year, and Peter Berg’s Lone Survivor this year. And Clint Eastwood’s upcoming American Sniper comes out next year.

All of this reminds us of Marcus Luttrell’s outstanding description of SEALs from the introduction to Service:

In these pages, you’ll get a glimpse of our elite special operations warriors who occasionally make headlines but strongly prefer to remain anonymous, quiet professionals.

Coming from a man who has written two books (and sold one of them to become a film), we couldn’t agree less.

May 02

One of the curious sociological trends of the last twenty years has been the continuous drop in violent crime across America. Even during the economic downturn, crime didn't increase, as some pundits predicted. (My favorite prediction came from trained-sociologist/NFL linebacker Ray Lewis, who predicted a crime wave if the NFL didn’t return. Unfortunately, we couldn’t test his prediction.)

Sociologists point to a number of factors to explain the decrease: harsher sentencing guidelines, stricter penalties for lesser crimes, demographics, gun control laws, and even abortion or lead paint. Because of the complicated subject matter, we’ll probably never be able to link the decline to one specific cause.

Some of the credit, as well, must go to the police forces across America. Solving and preventing crimes has to have some effect. If the police helped lower the crime rate, American politicians could argue the American people got a good return on their investment.

Of course, not all police funding is created equal. Following 9/11, in an effort to defeat Al Qaeda, police departments across America purchased gobs of vehicles, weapons and gear under the guise of “counter-terrorism protection”, including up-armored vehicles, automatic weapons, CCTV cameras and basically anything they wanted. Some of this counter-terrorism spending might have had the unintended consequence of helping police fight ordinary, non-terrorist crime.

But a lot of it probably did nothing except waste money. For example, the NYPD’s Intelligence Unit, and their controversial, “Demographics” unit, which made the news last year in two different investigative reports. Today, I want to run the numbers to see the opportunity costs--in other words, other ways we could have spent the money that might have been effective--for the NYPD Demographics Unit.

First, let’s understand the scale of the organization. According to the AP, the NYPD Intelligence Unit had a budget of $62 million in 2012, of which the Demographics Unit was a major part. It also doesn’t get audited by the New York City Comptroller Office. Apparently, the NYPD Intelligence Unit operates in eleven foreign cities, and countless geographies within the U.S. outside of New York City.

Next, let’s try to define the best possible benefits of this program, as unrealistic as they may be. As I did last time, I am giving the Demographics Unit a huge benefit of the doubt. According to New York City, the NYPD Demographics unit helped break up 14 different terror attacks since 9/11. The closest anyone came to success was Faisel Shahzad attempting to use a car bomb in Time Square. So let’s make these assumptions:

    Number of attacks prevented since 9/11: 14

    Average dead per attack: 50

    Average life years lost per victim: 40

This means that the NYPD Demographics Unit saved--at the upper bounds of unrealistic optimism--potentially 700 citizens, or 32,000 life years (life years is the expected number of years a citizen is expected to live; or average life expectancy minus current age; I’ve estimated forty years per victim) in terror attacks since 9/11. For this analysis--this is what I mean by benefit of the doubt--we are going to assume the NYPD Demographics Unit helped avert every single terror attack.

Knowing that the NYPD Intelligence Unit had a budget of $62 million, and estimating that the demographics unit is only about half of that budget--a guess on my part--by my calculations, New York City has spent roughly $300 million on the Demographics unit alone since 9/11. If the unit saved 700 people as I calculated, that means it spent roughly $400,000 per life saved, or $10,000 per life year saved.

So what are the opportunity costs of the NYPD Demographics Unit? Well, the time of the officers serving and the costs to run its operations. Even though the NYPD has fantastic resources, it still has limits. So what if, instead of establishing the Demographics Unit, the NYPD focused on discouraging open air drug markets, establishing community policing programs, and conducting increased gang intervention? What if the NYPD focused on organized crime or financial wrong doing? What if they had simply put more cops on the street to go on patrol? Those different uses of men and money are the foregone opportunity costs of setting up the NYPD Demographics Unit.

The biggest opportunity is clearly preventing homicides. Since 9/11, New York City has seen 6,500 murders. Imagine if, instead of combating the relatively rare phenomenon of terrorism, New York City had plowed that $300 million into solving and preventing murders. If New York had prevented about 12% of all the murders since 9/11, then it shouldn’t have spent the money on counter-terrorism.

Or imagine if New York City plowed that $300 million into true rehabilitation efforts. One of the sad facts of American “justice” is that recidivism--committing a crime after you’ve already been convicted and released--is extraordinarily high, at 67%. Why? Most Americans shun the Christian virtue of forgiveness and refuse to hire or support criminals who have paid their debt to society. Imagine if that $300 million had gone into supporting and helping lower the recidivism rate in New York City, through training and job aid programs. You might actually save money...

But here’s the thing: neither of those two opportunity costs really matter. In reality, the NYPD Demographics Unit hasn’t been credited with helping to stop a single terror attack since 9/11.

Not. A. Single. One.

Many of the cases the NYPD cited above never even approached feasibility. For instance, one terrorist wanted to cut the cables of the Brooklyn Bridge. How he planned to attach enough explosives without attracting attention is unclear. Indeed, the likelihood he would have even made it to the bridge is doubtful.

So the break-even isn’t 12% of murders prevented...its simply saving one. If the NYPD could have saved even one additional life by not having the Intelligence Unit, than it would have been better to spend the money on stopping crime. That’s right, all that money and time spent on the demographics unit is almost completely wasted.

Apr 08

(To read the entire "The (Opportunity) Costs of Security” series, check out the articles below...

- Two Supercomputers Diverged in the Woods

- Even More Ways to Use the World's Fastest Supercomputer

- How the NYPD Became the CIA: The (Opportunity) Costs of Security

- The (Opportunity) Costs of the First Iraq War

- The (Opportunity) Costs of ANOTHER War with Iraq)

 

It’s a sometime tactic among conservatives, when debating economics, to suggest to their liberal opponent to “take an econ class”. It happened two years ago on Facebook and Twitter when I published “The Chicago School of Counter-Insurgency”. When he was in college, our conservative uncles told Eric C, an avowed liberal, to “take an econ class” so many times that he borrowed an econ textbook from a friend and read the whole thing. 

Well, after a year of business school, I can say that I did take an economics course. [Eric C editorial: And since Michael C won’t write it, I will: he also made Dean’s list each quarter. #twinbrag.]

The criticism that I should take an economics course seemed particularly off when it came to “Getting Rid of the Chicago School of Counter-Insurgency”, because I didn’t mean to attack an entire subject matter, merely one particular ideological branch of economics that wildly underestimates the role of behavior in economics.

These attacks stung because I love economics. I love using economics--among many topics in B-school--to help explain the way the world works. B-schools make future MBA students take economics precisely because it has so many useful concepts.

Take opportunity costs. Opportunity costs are the benefits a firm foregoes by selecting a strategic option. In layman's terms, by choosing to do one thing, it means you can’t do another. In literary terms, for Eric C, Frost couldn’t walk down two paths. In business, choosing to build a factory means choosing not to use those funds to increase employee salaries, for example.

All decisions have opportunity costs, the advantages and costs of all other alternatives. Smart firms treat opportunity costs holistically, factoring in non-monetary costs like human capital, time, logistics and intangible benefits. (Though they usually convert them to the same unit, most frequently dollars.)

After 9/11, America as a nation responded to the threat of terrorism by passing the Authorization for Utilization of Military Force, the Patriot Act, the Intelligence Reform Act and hundreds of other authorizations and budget decisions. Each of these decisions by Congress, President Bush, and President Obama had opportunity costs. In liberal terms, spending a dollar on terrorism means not spending that dollar on economic stimulus, food stamps, or veterans. In conservative terms, every dollar spent means another dollar taken from taxpayers. In neo-conservative terms, every dollar spent raises the deficit.

With this in mind, we have to ask, knowing the concept of opportunity costs, was all that terrorism spending a good use of money?

We've described before and linked to the few lone voices making the intellectual argument that terrorism is rare, how unlikely it is to ever affect you or your loved ones lives. (Several times actually.) We've tried to explain how safe as a society we really are. But I’ve never written about the wasted money in terms of what we stand to lose as a society.

Why? Because opportunity costs are often abstract and especially hard to value. Fortunately, I think I have found a few prime examples of opportunity costs that I can measure. Even better, I will get to apply a little bit of back-of-the-envelope, consulting-interview-style, economic analysis to measure their impact. Obviously, I will have to make some assumptions and I will struggle to find a lot of the data.

In total, though, this is an exercise America needs to perform. Unfortunately for America, the security state doesn’t have itinerant economists trawling it for insights unlike, say, sports. Still, America shouldn’t forget the opportunity costs of the war on terror.

I mean, conservatives wanted us to take an economics course, right?