Dean's International Council Meets in Chicago
The Harris School's Dean's International Council (DIC) met in Chicago in early May to discuss a wide range of timely topics focused around the global economy. Speakers included Thomas Cole, a partner at Sidley Austin LLP's Chicago office, and John P. Gallagher, MPP'04, a former director in the Office of Iraq and Afghanistan Affairs at the National Security Council.
A prestigious group of leaders from the United States and around the world, the DIC acts as an advisory group to the Harris School in issues of international importance and is a source of new policy initiatives and resource development.
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Sharing his personal views of legal changes during the first 100 days of the Obama administration, Cole focused mostly on market regulation, but also touched upon trade and environmental policies. "The administration is a key player, but not the only player, in the change of the legal landscape for business," he explained. Many factors come into play, including a new Congress, a changing financial environment, and fiscal scandals.
Among the new administration's regulatory changes, Cole cited a revision of the Trouble Asset Relief Program, including requiring a stress test of banks with $100 billion or more of assets. He also highlighted passage of the $787 billion economic stimulus package and modifications to Federal Accounting Standards Board guidance on fair value accounting. Cole noted the changes also under consideration to the Securities and Exchange Commission regulation and enforcement offices, which was "described as being missing in action" during the start of the economic downturn.
"Congress, the SEC, and Federal Reserve have all expressed interest in regulating very significantly the unregulated portions of the financial system" said Cole, citing hedge funds and credit rating agencies. And he believes there will be a focus on simplicity and an increased level of diligence in any new regulatory framework.
"My personal concern about where this is going ... is I'm afraid we're going too fast," he said of the administration's target deadline of the end of the year for a regulatory overhaul. "If we succumb to political pressure to do it too fast, if we succumb to a race with other countries, I think we're going to get it wrong."
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Gallagher, formerly of the Office of Iraq and Afghanistan Affairs at the National Security Council, offered his personal perspective on the status of military efforts in Iraq and Afghanistan. While there has not been a terrorist attack on the United States in eight years, he noted that the United States is "deeper in conflict and confrontation" in the war on terror and therefore not safer overall. And the operational forces of the U.S. military are overworked. As an example, Gallagher pointed to the suicide and divorce rates among soldiers, as well as the extensive incentives and bonuses required to keep retention rates close to historical norms.
One original goal entering Iraq included transforming the country into a self-sustaining democracy, thereby helping to positively influence politics throughout the region. The Bush administration considered Iraqi President Saddam Hussein the only major barrier between the Iraqi people and widespread popular support for democracy. "Removing Saddam meant that people eager for freedom would choose to cooperate and coalesce around democratic institutions," said Gallagher.
"This meta-assumption proved fundamentally incorrect," he explained. "Democracy is not just the institutions and rules that enable it to function, but also the ideas that legitimize the institutions." Ideas typically come first, institutions second, which essentially is the reverse of what has happened in Iraq.
Rather than widespread support for a democratic Iraq, factions from within the country and throughout the region responded with suicide bombers and foreign fighters. Explained Gallagher, "[Al Qaeda in Iraq's] primary goal was to ensure that the West did not succeed, and they were determined to do this by maintaining rupture, however necessary." In these circumstances, coalition forces were both the victim of insurgent attacks and the punisher of the insurgents, creating a cycle of vengeance that destabilized Iraq's fledgling democracy.
It wasn't until 2007-four years into the conflict-that the strategy shifted heavily to population security as a precondition for political and economic progress. As the coalition increased security, the people provided tips about insurgents and the coalition made important gains, helping to reverse the cycle.
As Iraq started to improve, attention shifted to Afghanistan. "If you look at what we're facing in Afghanistan, it's tougher. One reason is that it doesn't have the wealth Iraq does." Gallagher explained Iraq's wealth, relative to Afghanistan, promotes governance needed to help distribute that wealth effectively. Additionally, Afghanistan's more mountainous terrain makes even the simplest goals harder to accomplish. Poppy production provides financial support for the Taliban, and sanctuary across the Pakistani border makes the insurgency even tougher to defeat.
Gallagher stated approximately 10 to 12 percent of the population supports the Taliban, which is enough to enable insurgent activity indefinitely. "We're having a difficult time overcoming the impact of this support, and the international forces have not been able to counter the deep fear the Taliban instills." Gallagher suggests this is in part because not all Afghans embrace Western ideas: "Some see popular sovereignty as a shift away from-even a threat to-God's sovereignty."
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Council members also heard from Michael Chertoff, former U.S. secretary of homeland security, about the various emerging threats to U.S. security in a technology-driven world. He touched on a wide range of topics from foreign militants groups to Mexican drug cartels to non-military issues like pandemic flu. Read more >>
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