What if the United States were really and truly a low-tax country whereby legislators, bound and dedicated to the Founders’ deep skepticism about government, made it their legislative aim to severely limit the flow of dollars to the U.S. Treasury? The question is an idealistic one, and for obvious reasons: politicians love that people stand up when they walk into a room (Tom Wolfe, A Man In Full), plus those same politicians want a rich retirement that will only be rich insofar as the federal government continues to grow.
Idealistic notion or not, I found myself thinking about it a lot while reading Washington Post columnist Shadi Hamid’s excellent new book, The Case for American Power. While I disagree philosophically with Hamid about the use of American power, he writes and articulates ideas so well. And he crucially makes you think. Which means there’s a lot of learning from the book, spectacular references within it, and numerous insights that will be used for a long time in my own writing that mostly centers on economics.
It brings us back to the taxation question, and my view of Hamid’s book through the taxation question. As the title makes evident, Hamid is making a case for American power. This would surprise some because he writes for a Washington Post historically skeptical about the projection of U.S. power, but also because by Hamid’s own admission, he swings left.
Hamid’s leanings are noted because as he reports on p. 61, as of 2023 60 percent of Republicans polled indicated they were “extremely proud” to be American, while only 29 percent of Democrats feel the same way. Throw in that Hamid is both a Muslim and of Egyptian descent, and it’s perhaps more surprising that he would have a stance in favor of U.S. power when it’s remembered that the person occupying the White House right now (p. 86) “made a ban on immigration from Muslim countries his signature campaign issue in the 2016 election.” Yet there’s more.
In The Case for American Power, Hamid introduces readers to a word (p. 62) first coined by Roger Scruton, oikophobia. The latter is “the fear or hatred of home or one’s own society.” About the word, Hamid is not afraid to say that it’s more likely to afflict the left-leaning and privileged. In Hamid’s words (p. 61), a “tendency toward self-contempt is disproportionately concentrated among people of privilege, particularly left-leaning elites.” Hamid checks those boxes, which is part of what makes his book so appealing and interesting.
Though left leaning, and of the Egyptian elite, Hamid is not afraid to go against type. He believes what he believes or something like that. As he writes at book’s end (p. 188), “If America is ‘almost a religion,’ then, well, it’s one I believe in.” Keep in mind this isn’t just coming from a left-wing intellectual, but one who, while at Georgetown during the Iraq War, was protesting the U.S.’s actions over there, singing against them, etc. Is Hamid evolving for the better, or worse? Readers can decide.
What would have fascinated me is for the author to have devoted a chapter to how friends from the Georgetown years, the Washington Post editorial page of old, and Brookings Institution colleagues from the past would view his evolution, or how they do. The question is rooted in the reality that some who lean right will read Hamid’s book and find much to agree with.
Hamid believes the world needs a power, and more specifically one with good, seemingly benevolent qualities. He writes early on (p. 3) that “Power is a fact. Someone must wield it.” Hamid believes the U.S. is just that nation.
Where it becomes interesting, if not surprising, is that Hamid doesn’t make his case for the U.S. through rose-colored glasses. Which is why limited government proponents who would like to see U.S. power as presently utilized in “retreat,” or wholly re-engineered through increased, tariff-free economic engagement with the world (your reviewer), will frequently find themselves in disagreement with Hamid. Perhaps more interesting is how self-proclaimed limited government conservatives who don’t want to see the U.S. in theoretical “retreat” will perceive Hamid’s book. It seems they’ll agree while frequently disagreeing with him.
That’s because the same person in Hamid who makes a case for American power does so while not hiding his frequently negative feelings about the United States. On p. 4 he writes that “Americans are no longer, if they ever were, in a position to lecture the rest of the world on human rights.” Trite as the phrasing has become, Hamid believes two opposing notions can be true at the same time, that while in his estimation (p. 19) the U.S. “has caused untold destruction in the developing world,” the power that it possessed to allegedly cause the destruction “can be used for good.”
Without endorsing Hamid’s negative commentary (more on my own views in a bit) about the U.S., he contends that he’s the right person to make a case for American power (p.4) “precisely because I have mixed feelings about the whole enterprise.” Perhaps Hamid is right? It’s hard to say what best positions anyone to make any policy case. Right or wrong, Hamid will once again make you think, and arguably think more because of his skepticism about the same nation that he believes should project more power.
Hamid writes (p. 12) that the “United States, for all its faults, is far preferable to the available alternatives” in a power sense. Arguably more important, at least for the rest of the world, is that he contends (p. 9) an “America-dominated world has been safer and less violent – all by a large margin,” that (p. 26) “a more just world order is impossible without American power,” that the United States is (p. 12) “better.” Though a much more perfect world in the eyes of Hamid (what he describes as the “nirvana fallacy”) would include another United States (p. 20), “we must compare the United States to the alternatives that are actually available or at least plausible.”
Which means the other U.S. can’t be China, since China isn’t just (p. 8) “on the decline” in Hamid’s estimation (I disagree, and the expansion of U.S. corporations is the basis of my disagreement), it’s also (p. 3) “a brutal authoritarian regime that has only become more brutal with time.” Russia? The question answers itself.
Still, just because there’s no other United States willing to be the United States doesn’t mean that the U.S. should be what Hamid thinks it should be. Which is where the discussion perhaps becomes more interesting as ideologies formerly at odds with one another appear to agree with those they used to disagree with.
It recalls the question asked at this review’s beginning. What if there were substantial limitations placed on federal taxes collected? Forget tax rates, which are in no way indicative of light or heavy taxation. Confused? Think Elon Musk. He could be taxed at a 0.00001 rate, but would still pay more taxes than 99.9% of individuals anywhere in the world. Which is the problem with tax rates.
People, including economists, say they’re low or high based on the rate. What a dangerous way of looking at things. What it means for the U.S. is that wildly enterprising Americans pay lower tax rates than workers do in European countries, but they obviously pay much more in the way of taxes. There’s all sorts of evidence supporting this claim, but the paradoxical evidence making the previous case best can be found in $39 trillion worth of federal debt: there’s quite simply no way the U.S. could have all that debt unless Americans were paying taxes in enormous amounts now, and expected to hand over much more in the future.
Translated, Americans haven’t scratched the surface of their capacity to create wealth, which means they haven’t scratched the surface of how much they’ll pay in taxes. See the debt again to grasp this truth.
Assuming Hamid accepts the seemingly paradoxical thinking here that suggests the national debt is an effect of too much tax revenue now, and much more notable, the expectation of much more tax revenue in the future (a major theme of my latest book, The Deficit Delusion), he might conclude optimistically from it that the United States not only should project power globally, but it will have abundant means to do so.
Of course, that explains my disagreement with Hamid along with my agreement with theoretically strange bedfellows like Barack Obama. The lefty in Hamid was surprisingly negative about Obama in The Problem of Democracy, but Hamid’s problem with Obama was what had me praising him. As with Hamid’s previous book, he quotes Obama as saying (p. 14-15) “Don’t do stupid shit.” That’s Obama’s expressed foreign policy, and it reads as brilliant to me.
Which explains my problem with market expectations of rising tax revenues in the future that enable even more borrowing in the present. The sad fact that the U.S. political class has so much money to burn means that the federal government is always doing things, and increasingly projecting American power.
All of which speaks to where Obama would disagree with me while Hamid, who doesn’t agree with Obama about limiting the projection of power, would seemingly agree with Obama. My deeply held view is that “stupid shit” is redundant when the government Hamid wants to project more power collects over $5 trillion in taxes each year, and borrows more. Government is an ass, period. And then governments with trillions at their disposal…
Hamid writes on p. 55 that “Washington squandered over $4 trillion on the conflicts in Iraq and Afghanistan,” after which he adds that “Presumably some of that money could have been spent at home, upgrading American infrastructure and boosting America’s competitive advantage in strategic industries.” No! If there’s any silver lining to the tragedies in Iraq and Afghanistan, it’s that the money wasn’t spent stateside.
Say it repeatedly that “government spending” is merely kind phrasing for the centrally planned allocation of precious resources in politicized fashion. Government spending doesn’t grow the economy, by its description it damages it. If the previous assertion weren’t true, West Virginia would be booming. So would every economically struggling U.S. locale.
Notable about this assertion is that Hamid arguably understands its validity well, and not just because he observes (p. 44) that “Today, in hindsight, the Soviet Union’s fatal weaknesses are obvious.” From this we can deduce that central planning fails in total. If true, it’s difficult to make a case that it succeeds when foisted on us in narrower amounts.
From there, consider Hamid’s previous book (my review here). In it, he quotes a Muslim Brotherhood type asking Hamid “why would the West help Egypt become a powerful country, so that Egypt becomes independent and not needing the U.S.?” An essential question precisely because it signals the fatal flaw in government consumption whether domestic or global. The incentives are all wrong, among many other things.
All we need to do to see why is to ask the same question posed to Hamid by the Muslim Brotherhood type, but with slight variations: “why would the social worker/government agency/politician help the welfare recipient/teenage mom/economically backwards state become independent and no longer in need of the social worker/government agency/politician?” Well, what’s the answer? Tick tock, tick tock.
If the answer is that social workers, government agencies and politicians are selfless, it remains that government consumption is just central planning on the relatively micro level. It doesn’t work. It generally perpetuates whatever malady it intends to fix, and for obvious reasons: central planning fails, always and everywhere.
Which is what explains this review’s opening, and what also has me worried. My strong sense is that Hamid is right, that the United States is better. From this, my sense is that its use of power around the world is well-intentioned. But by that measure, so is most government spending stateside. The problem is that it once again doesn’t work. And we know why.
Why did the Great Depression last so long? It wasn’t the Fed, or sunspots, or the rise of Hitler and others in Europe, it was an effect of Presidents Hoover and FDR fighting the always, always, always cleansing effects of recession. Economic downturns aren’t a sign of an economy in decline, they paradoxically signal an economy on the mend as bad hires, bad strategies, and bad acquisitions are reversed. Put another way, hangovers aren’t the problem, they’re the signal to drink less at night. Economic downturns are no different.
We see this through individual businesses. Pixar founder Ed Catmull observed in his memoirs that all our movies “suck at first.” At Pixar, film production is defined by relentless running to errors so that they can be fixed. Translated, there are mini and big recessions at Pixar all the time. Absent them, Pixar’s finished products would suck. Economies are just people, and people need to realize their errors. Government spending not only deprives the economy of resources, it delays error realization while frequently encouraging it. Which requires a pivot to Israel.
In thinking about Israel, there’s realistically no way of thinking about it or discussing it without angering someone, somewhere. It’s worth adding as someone who caucuses with the right that conservatives have their “snowflake” qualities in ways they’re loathe to admit. Frank discussions of Israel are perhaps an area where this reveals itself.
Ok, so consider Israel through Hamid’s assessment of Barack Obama. It may surprise readers that Hamid is once again rather negative about the 44th president. He quotes Pulitzer Prize winner Nathan Thrall as observing about Obama that (p. 142) “In no American president did Palestinians invest higher hopes than Barack Obama, and in none did they come to feel more profound disappointment.” He quotes negotiator Khaled Elgindy (p. 144) as concluding that “When it comes to Israeli-Palestinian peacemaking, no U.S. president has promised more and accomplished less than Obama.” In Hamid’s own words about Obama on the Palestinian question vis-à-vis Israel (p. 143), “Obama was strong in words, timid in action. In the end, little progress was made.” He adds (p. 144) that “Obama was simply unwilling to back his tough talk on settlements with anything tangible.”
Why all this man bites dog throat clearing about a lefty intellectual’s disdain for Obama ahead of a discussion of Israel? It’s rooted in the fact that Obama, (p. 142) “well informed, motivated, and above all sympathetic to the Palestinians,” (p. 144) “actually increased military aid to Israel” in his second term, “securing $38 billion over ten years, the most generous aid package to a foreign country in American history.”
Which is where some or many readers might become offended. As a prelude to avoid offending some, I think Israel a brilliant country, I agree with George Gilder (my review of his book, The Israel Test, here) that “the survival of the Jews is vital to the triumph of free economies,” plus surely lean to Gilder’s view that “if the Arabs or Iranians desired peace [with Israel], they would have long ago achieved it.” At the same time, I wonder. As conservatives have long preached, incentives matter. And with incentives top of mind, does billions in military aid change the demeanor and calculations of Israel in ways that are inimical to peace in the Middle East? What about the growing willingness of the U.S. to project power over there?
In asking these questions, it can’t be stressed enough that they’re meant for Hamid every bit as much as they’re meant for supporters of Israel. Hamid wants the U.S. to exert power, so do the Israelis, but power invariably involves money and guns and seemingly unhappy outcomes for all concerned. Funny here in a review about a book that acknowledges the increasingly strange bedfellow nature of geopolitics, is that seemingly Hamid and the Israelis are making a case for American power, but that seems to be the problem. Government is once again an ass.
That government is an ass is obviously the argument of your reviewer, and it’s arguably the implied argument of Obama, though he won’t say it. What about the Trump leaning who are described as “isolationist”? Hamid views them as the problem in a sense, that (p. 12) “the problem is that a growing number of Americans are unable or unwilling to accept this reality,” and Hamid’s reality is that the U.S. power is much needed globally.
Adding to the irony is that while Hamid views Trump voters as too “unwilling” to accept the U.S. as a nation exerting growing amounts of global heft, he’s clearly torn about disdain for President Trump himself. Much as Hamid plainly wants to dislike Trump’s perhaps feigned know-nothing ways relative to Obama’s knowledgeable and cool demeanor, Hamid acknowledges that (p. 148) “there was something almost refreshing” about Trump. While past presidents in Hamid’s telling revealed virtue in their hypocrisy (talking up the genius of democracy while making nice with autocrats – think Bill Clinton increasing “economic and military aid to various Arab regimes precisely as they were becoming more authoritarian” – p. 134), Trump couldn’t and can’t be bothered to be a hypocrite. Instead, during his first term Trump (p. 148) revealed “a complete lack of interest in American support for human rights and democracy abroad.” Where it becomes almost comically endearing in some odd way is that Hamid adds about Trump, human rights and democracy that “It wasn’t so much that he couldn’t be bothered, more that it didn’t seem to occur to him to be bothered in the first place.”
Which invariably brings us back to questions about what Hamid wants. Though left leaning, he’s seemingly politically homeless. Except for Trump, he sees all U.S. presidents before him as hypocritical in some way or the other for having pretended to aspire to virtue. How then, with these flawed people does the U.S. assert power in ways that make the world better?
It returns me to the problem of too much money. Hamid once again laments $4 trillion spent in Iraq and Afghanistan while thinking what could have been done here, but can he point to successful allocations by politicians here? Did the War on Poverty work? Are all Americans health secure thanks to Medicare and Medicaid? It just seems Hamid is delayed in getting to a happy or depressing truth that what government touches, it worsens.
Hamid entertainingly cites commentator Austin Mackel (p. 24) as saying about Iraq before the mistaken 2003 invasion, that “it was just sitting there, being Iraq.” So well put! Then the U.S did something with an endless supply of money provided by its excessively taxed citizenry.
Easily the most fascinating quote in the book was of an unnamed Muslim writer (why Hamid didn’t name him is a mystery) who, writing in 2022, observed with mystification that the “sum power of Muslim states is a mere mouse compared to the elephant that is the USA. Yet [the] American elephant was mobilized against this mouse for twenty straight years.” Yes, it’s tragic. Talk about stupid shit. But that’s the point that Democrats don’t realize, but neither do supply side Republican happy talkers in their glee about rising tax revenues born of lower tax rates. Neither side recognizes that the excess of taxation revealed through endless revenue and a commensurate ability to borrow based on that revenue is the problem.
The view here is that Hamid misses the very real problem of excessive tax revenue in his overall thesis of power asserted. The combination of power and money is dangerous, which explains why U.S. efforts to make things better frequently don’t work out as planned.
On the matter of democracy, Hamid remains a fan, albeit skeptical. He’s willing to quote the greatest skeptics (p. 75) like John Adams (“there never was a democracy yet, that did not commit suicide”) and James Madison (“short in their lives as they have been violent in their deaths”), but perhaps misses why Adams and Madison were so skeptical. Hamid gives the impression that he believes democracies fail because the voters frequently aren’t educated, but the founders’ disdain had little to do with education when it’s remembered most Americans weren’t educated, and most of the world wasn’t. The problem with democracy then and now is that majorities are bad.
Obviously skeptical himself of autocracies (with good reason), Hamid asks on p. 49 “if the Soviet Union was in fact weak, how was it possible that so many people misinterpreted the weakness as strength?” Except that there was arguably no misinterpretation. As Max Frankel made plain throughout his New York Times memoirs (my review here), Eisenhower knew the Soviets were weak, so did JFK, and so for that matter did Khruschev. It’s worth adding for the left leaning who will perhaps read this review that the other person who understood that the Soviet Union was somewhat of a paper tiger was Ronald Reagan. Thankfully, arguably relievedly, Hamid quotes Reagan’s brilliant 1982 speech in which he made clear that “we win, they lose” would be reality, that (p. 49) “optimism is in order, because day by day democracy is proving itself to be a not-at-all-fragile flower,” while “the regimes planted by totalitarianism have had more than 30 years to establish their legitimacy. But none – not one regime – has yet been able to risk free elections. Regimes planted by bayonets do not take root.” Well, yes.
Beyond the book’s highly interesting thesis is that as mentioned previously, the book itself is just so interesting. Why will I keep Hamid’s book close by at all times? It’s because there’s so much within it that’s eminently quotable. He found great stuff. He quotes JFK hagiographer Arthur Schlesinger as writing about Soviet-era stores (p. 45) that “I found more goods in the shops, more food in the markets, more cars in the street – more of almost everything, except, for some reason, caviar.” From Paul Samuelson’s best-selling college textbook Hamid gifts us with how (p. 44) it was “a vulgar mistake to think that most people in East Europe are miserable.” John Kenneth Galbraith? On p. 45 we have “Partly, the Russian system succeeds because, in contrast to Western industrial economies, it makes full use of its manpower.” These quotes are particularly joyous coming from Hamid since (p. 126) he went through his “radical, pseudosocialist phase in college.”
Disagreements? Beyond the obvious philosophical ones, I yet again disagree with Hamid that China is in decline. He adds on p. 106 that China's “citizens forsake their freedom in return for economic gains based on cheap labor.” No, that’s just not true. If cheap labor were a stimulant, Pacoima, CA would boom as Palo Alto faltered. Cheap labor is very expensive as Henry Ford could have told Hamid, and as any small business owner could tell him now. On p. 180 he suggests that falling birthrates signal doom. No, they don’t. Nicholas Eberstadt’s birth dearth arguments just won’t die. They’re nonsense, and AIs doing the work of literally thousands of humans will make what was always ridiculous even more so. We’re on the verge of a global productivity explosion.
What would I most like to ask Hamid? On p. 157 he criticizes the Americans (presumably people like Tucker Carlson) who say “When Russia commits atrocities, America is still the ultimate cause.” Implied here is the popular argument that if the Biden administration hadn’t signaled the possibility of Ukraine joining NATO that Putin wouldn’t have invaded. I’ll admit to having been sympathetic to the argument. I found myself wishing Hamid would address this more.
Bringing the review/analysis to a close, it will be said again that the challenge that comes with the U.S. exerting power is that the exertion is through government becoming a bigger and bigger resource allocator, frequently in ways Hamid doesn’t approve. Hamid asks (p. 127) “To what extent is the harm we cause deliberate,” and my answer yet again is that it’s rarely so. Americans don’t want to do bad. But perhaps it’s a human trait to seek dependency. We get a lot of the latter, and frequently much worse.
Which is why I can wholeheartedly recommend Shadi Hamid’s insightful, interesting and eminently readable book while also disagreeing with it. State power doesn’t become good power just because the country is good, or better. Government is a problem because central planning is a problem, and a rich, “better” country like the U.S. can foist a lot of well-intentioned central planning on the world, some or lots of involving guns and bombs. In short, more American power isn’t better for the same reason that more central planning isn’t. Freedom is the only unbridled good, particularly when the freedom includes the ability to fail over and over again.
