Stanford University

The Price of Liberty: Paying for America's Wars

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About the speaker:

Robert D. Hormats is Vice Chairman of Goldman Sachs International. He joined Goldman Sachs in 1982 and became a Managing Director in 1998.

Mr. Hormats served as Assistant Secretary of State for Economic and Business Affairs from 1981 to 1982, Ambassador and Deputy U.S. Trade Representative from 1979 to 1981, and Senior Deputy Assistant Secretary for Economic and Business Affairs at the Department of State from 1977 to 1979. He served as a Senior Staff Member for International Economic Affairs on the National Security Council from 1969 to 1977, where he was Senior Economic Advisor to Dr. Henry Kissinger, General Brent Scowcroft, and Dr. Zbigniew Brzezinski. Mr. Hormats was a recipient of the French Legion of Honor in 1982 and Arthur Fleming Award in 1974.

Mr. Hormats has been a visiting lecturer at Princeton University and is a member of the Board of Visitors of the Fletcher School of Law and Diplomacy and the Dean's Council of the John F. Kennedy School of Government at Harvard University. He is a member of the Council on Foreign Relations and a board member of the Irvington Institute for Immunological Research, Engelhard Hanovia, Inc., The Economic Club of New York, and Freedom House.

Mr. Hormats' latest book is entitled The Price of Liberty: Paying for America's Wars and was featured in Thomas Friedman's March 7, 2007, New York Times column "Don't Ask, Don't Know, Don't Help." Hormats' other publications include Abraham Lincoln and the Global Economy; American Albatross: The Foreign Debt Dilemma; and Reforming the International Monetary System.

Mr. Hormats earned a B.A. from Tufts University in 1965 with a concentration in economics and political science. In 1966 he earned an M.A. and, in 1970, a Ph.D. in international economics from the Fletcher School of Law and Diplomacy.

About the moderator:

Professor David M. Kennedy is the Donald J. McLachlan Professor of History at Stanford University. Reflecting his interdisciplinary training in American Studies, which combined the fields of history, literature, and economics, Professor Kennedy's scholarship is notable for its integration of economic and cultural analysis with social and political history. His 1970 book, Birth Control in America: The Career of Margaret Sanger, embraced the medical, legal, political, and religious dimensions of the subject and helped to pioneer the emerging field of women's history. Over Here: The First World War and American Society (1980) used the history of American involvement in World War I to analyze the American political system, economy, and culture in the early twentieth century. Freedom From Fear: The American People in Depression and War (1999) recounts the history of the United States in the two great crises of the Great Depression and World War II. In 2000, the book was awarded the Pulitzer Prize, the Francis Parkman Prize, the Ambassador's Prize, and the California Gold Medal for Literature.

Professor Kennedy teaches both undergraduate and graduate courses in the history of the twentieth-century United States, American political and social thought, American foreign policy, American literature, and the comparative development of democracy in Europe and America.

About The Price of Liberty: Paying for America's Wars:

In a bracing work of history, a leading international finance expert reveals how our national security depends on our financial security

More than two centuries ago, America's first secretary of the treasury, Alexander Hamilton, identified the Revolutionary War debt as a threat to the nation's creditworthiness and its very existence. In response, he established financial principles for securing the country--principles that endure to this day. In this provocative history, Robert D. Hormats, one of America's leading experts on international finance, shows how leaders from Madison and Lincoln to FDR and Reagan have followed Hamilton's ideals, from the greenback and a progressive income tax to the Victory Bond and Victory Garden campaigns and cost-sharing with allies.

Drawing on these historical lessons, Hormats argues that the rampant borrowing to pay for the war in Iraq and the short-sighted tax cuts in the face of a long-term war on terrorism run counter to American tradition and place our country's security in peril. To meet the threats facing us, Hormats contends, we must significantly realign our economic policies--on taxes, Social Security, Medicare, and oil dependency--to safeguard our liberty and our future.

Quotes in praise of The Price of Liberty: Paying for America's Wars:

"Bob Hormats has taken on the impossible: making lively history of the fiscal side of America's wars. Taxes and spending, economics and politics, all mixed up together in times of national crisis, from the Revolution and Alexander Hamilton to Iraq and both George Bushes. There are lessons to be learned and too often forgotten, even for the financing of the new 'War on Terror.'"--Paul Volcker, former chairman of the Federal Reserve

"The Price of Liberty is both a superb history and an urgent call for appropriate fiscal policy in the current campaign against terrorism. Hormats shows that, time and again, how wars were paid for determined how wars were fought--and won or lost. An important and timely book."--David M. Kennedy, author of Freedom from Fear

"Robert Hormats mounts a compelling argument that America faces large-scale economic catastrophe due to lack of a long-term, fiscally sound strategy for meeting military and security needs as well as domestic obligations. The Price of Liberty is a fascinating book and its message is hard to ignore."--Henry Kissinger

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CISAC Conference Room

Robert D. Hormats Vice Chairman, Goldman Sachs International Speaker
David M. Kennedy (Moderator) Donald J. McLachlan Professor, History, Stanford University, and Winner of the 2000 Pulitzer Prize Moderator
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The null hypothesis in Iraq

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Those for and against the "surge" in Iraq have made predictions of what will happen if their recommendations are not followed. "But there's only one thing we know for sure," according to CISAC's Michael M. May. "When the collection of politicians and pundits we call 'Washington' makes predictions about countries in which the U.S. has 'vital interests'(and especially about countries with which we have had bad relations), the predictions--even when they contradict one another--are almost always wrong." The solution, May writes in the Los Angeles Times, is for Washington to take a tip from scientists and start with the "null hypothesis" to guard against bias in testing predictions. Policy makers should assume that no theory starts out with more predictive value than chance, and then use data to prove which theory is more sound.
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Security and Policy Issues as seen by the United States and Europe

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Dominique Struye de Swielande became ambassador of Belgium to the United States on December 29, 2006. Ambassador Struye previously served as Belgium's permanent representative to NATO (2002-06), ambassador to Germany (1997-2002), head of cabinet for the state secretary for international cooperation (1995-96), and director-general for administration at the Ministry of Foreign Affairs (1994-95). In addition, Ambassador Struye was diplomatic counselor and deputy head of cabinet for the prime minister (1992-94), head of cabinet for the minister of foreign affairs (1991-92), director of the European Section at the Ministry of Foreign Affairs (1990), deputy permanent representative and consul general to the United Nations in Geneva (1987-90), as well as counselor in the cabinet of the foreign affairs minister (1984-87). He has also served postings in Zaire, Zimbabwe, Nigeria and Austria.

Ambassador Struye, who joined the Ministry of Foreign Affairs in 1974, holds a doctorate in law from the Catholic University of Leuven, a master's of law from the University College London, and a master's of European Law from the University of Ghent.

 

Event Synopsis:

Ambassador Struye describes the difficulty in defining common security interests between Europe, where ideas of security tend to revolve around individual welfare provided by the state, and the United States, where international terrorism is viewed as the predominant security threat especially after 9/11.

Ambassador Struye then describes three major multilateral institutions and their role in global security: the UN, NATO, and EU. He outlines how the UN has expanded in recent years, both in terms of membership and of issue areas. Belgium has been actively involved in security discussions within the UN, and has shared the disappointment of the US about the limited capacity of the UN to contribute to peace and security in the world. He then addresses NATO's recent evolution in the direction of "out of area" policy, influenced by American pressure for NATO to become a security provider outside of Europe, including as an "instrument of democratization." Finally, Ambassador Struye describes the development of political mechanisms of the European Union which are now moving toward building common foreign and security policy, which the ambassador sees as important even without a European military force.

The ambassador details several challenges, including the difficulty  of evaluating common threats, determining how global a regional organization should be in its policy and how each organization should relate to the others, and a lack of a coherent global vision for how the world should evolve. Two policy areas where Ambassador Struye sees consensus are Afghanistan and missile defense. He concludes that although security policy is hard to define across regions, multilateral organizations are essential and the transatlantic alliance remains indispensable.

A discussion session following the talk included such issues as whether Turkey should be a member of the EU given its UN and NATO membership, how the ambassador views prospects for relations between North Africa and the multilateral institutions he describes, whether sufficient development funding should be available before military interventions in places like Afghanistan and Iraq, and whether the EU might come to serve as a world power in its own right.

Richard and Rhoda Goldman Conference Room

Dominique Struye de Swielande Ambassador of Belgium to the United States Speaker
Seminars

The Missing Link: State-building and the Rule of Law in Afghanistan

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J. Alexander Thier is Senior Rule of Law Advisor at the United States Institute of Peace. Prior to joining USIP, Thier was Scholar-in-Residence at Stanford University's Center on Democracy, Development, and the Rule of Law, and a National Fellow at the Hoover Institution. From 2002 to 2004, Thier was legal advisor to Afghanistan's Constitutional and Judicial Reform Commissions in Kabul, where he assisted in the development of a new constitution and judicial system. Thier has also worked as a UN and NGO official in Afghanistan from 1993-1996, as well as in Iraq, Pakistan, and Rwanda. He has written extensively about Afghanistan and is a contributing author of the newly released "Twenty-First Century Peace Operations," edited by William Durch, and was lead project advisor on the PBS documentary, "Afghanistan: Hell of a Nation."

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Encina Ground Floor Conference Room

J Alexander Thier Senior Rule of Law Advisor and Co-Director Speaker International Network to Promote the Rule of Law (INPROL)
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What Arabs Think and Does It Matter?

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Shibley Telhami holds the Anwar Sadat Chair for Peace and Development at the University of Maryland, and is a non-resident Senior Fellow at the Brookings Institution. Previously, he was the Director of the Near Eastern Studies Program at Cornell University and has taught at Ohio State University, the University of Southern California, Princeton University, Columbia University, Swarthmore College, and the University of California at Berkeley. His publications include Power and Leadership in International Bargaining: The Path to the Camp David Accords (Columbia University Press, 1990); International Organizations and Ethnic Conflict, ed. with Milton Esman (Cornell University Press, 1995); and Identity and Foreign Policy in the Middle East , ed. with Michael Barnett (forthcoming, Cornell University Press, 2001); and numerous articles on international politics and Middle Eastern affairs.

Professor Telhami has actively been bridging the academic and policy world. He served as advisor to the United States delegation to the United Nations during the Iraq-Kuwait crisis, and was on the staff of Congressman Lee Hamilton. He is the author of a report on Persian Gulf security for the Council on Foreign Relations, and the co-drafter of a Council report on the Arab-Israeli peace process. Professor Telhami is a member of the Council on Foreign Relations and a member of the advisory committee of Human Rights Watch/Middle East. He has been a member of the American delegation of the Trilateral American/Israeli/Palestinian Anti-Incitement Committee mandated by the Wye River Agreement between Israel and the Palestinians and has a weekly radio commentary broadcasting widely over the Middle East.

He received his B.A. from the Queens College of the City University of New York (1974), M.A. from the Graduate Theological Union, Berkeley (1978), and Ph.D. from the University of California, Berkeley (1986).

Professor Telhami will be reporting on his latest poll of Arab public opinion and interpreting the results on key issues.

Daniel and Nancy Okimoto Conference Room

Shibley Telhami Senior Fellow Speaker Brookings Institution
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Reconsidering Our Foreign Policy: America's Second Chance in Iraq

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Michael A. McFaul
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Michael A. McFaul - Finally, some good news from Iraq. The arrest of Saddam Hussein last weekend sends a powerful and positive signal to the Iraqi people. Restoration to power is no longer a threat. Hussein will never terrorize his people or his neighbors again.

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McFaul
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Win-Win U.S. Strategy for Dealing with Iran

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In an article written for the current issue of the Washington Quarterly Larry Diamond, Michael A. McFaul and Abbas Milani, suggests that the U.S. government seek a comprehensive agreement with Tehran that would "end the economic embargo, unfreeze all Iranian assets, restore full diplomatic relations, support the initiation of talks on Iran's entry into the WTO, encourage foreign investment, and otherwise move toward a normal relationship with the Iranian government." In exchange, Iran would have to suspend its nuclear weapons program...
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